The company’s “solid” results were revealed yesterday (Wednesday 1 October), reporting strong like-for-like sales across its pubs.
Like-for-like sales in its retail estate increased by 4.4% with revenue at £82.6m (up from £81.1m) while tenanted like-for-like pub income was up 1% and revenue hit £35.6m (compared to £34.9m in 2024) - up 2.3%.
In the update, the business revealed it had absorbed a total of £18.5m of inflationary costs.
Neame told The Morning Advertiser (The MA): “[We are] trying to drive operational excellence where we can. Doing some great investments in our pubs and have a couple of good projects in the pipeline.
“Investing for the long term is a key thing and repositioning our portfolio. We have developed some great new beers this year which are performing well in the on-trade and can help drive beer in our own pubs.
“Investing in our people and the outcome for that on our pub side, has meant our like for likes inside in the M25 are strong.
“We are doing as well as anyone.”
Absorbing costs
According to the update, the second half of the year showed the incremental cost of national living wage and employers’ national insurance from April 2025 compared with 2024 was £600,000 and the business is anticipating a further hike in 2026 of £2m.
The pub company boss outlined the impact of the higher cost of labour has had on the business and how it is mitigating this.
He said: “We are looking very tightly at they way we schedule and deploy our labour.
“We are also changing a number of our lower turnover sites into tenancies as well as trying to buy better and manage food operations as tightly as possible.
“[We are doing] a lot of small things and we’ve been clear it will take us through 2026 to implement all these different initiatives to become as productive as we possibly can.
“We are confident we will manage to get to a satisfactory position and are continuing to invest at the same rate because at some stage, these pressures will ease.
“[We were] the first to report in the post-April world when all the costs came in.”
Looking ahead to the Budget next month (November), Neame said while business rates reform would be helpful, compared to other costs, it wouldn’t make a huge different.
The chief executive added: “Anything is helpful [but] it will be partly offset but the potential loss of reliefs and by new revaluations.
Strategic goals
“It is essential and will be welcomed if it is the maximum but it will pale into insignificance compared to the cost of national insurance.”
As part of its strategic goals, the Kent-based operator highlighted how beer was its differentiator and how it will continue to innovate as market trends develop to help drive its own beer volume in all channels.
While historically Shepherd Neame’s portfolio has been focused on ale and the firm remains committed to the category, it is adapting accordingly to changing consumer habits.
Neame continued: “Historically, while there’s still a market for ale, it is a challenged sub sector. We put in a small batch brewery a couple of years ago, which gave us flexibility for new styles.
“A few recently include a hazy session IPA - First Drop, which has had a really good response in the market, we also have a new stout Iron Wharf, which is also performing well.”
The pub group and brewing boss was optimistic about the future of the business, following its results and the sector overall.
“We’re quite pleased with those pub numbers, tenanted has certainly seen a step up since the prior year and it had a good year then,” Neame said.
“For all the negativity, I would say the sector is incredibly resilient, never forget that.
“It is also got lots of opportunities because it’s so fragmented, which I see as an opportunity.
“What we need is for the Government to stop putting roadblocks in our path and the sector will overnight get into better health.”
