Shepherd Neame, UK's Oldest Brewer and owner and operator of a 327 high quality pub estate, has announced results for the 52 weeks ended 24 June 2017.
The group's turnover increased by 11.7% to £156.2m (2016: £139.9m). Underlying operating profit was up by 7.2% at £15.3m (2016: £14.2m), and underlying profit before tax was up by 8% to £11.2m (2016: £10.3m).
Statutory profit before tax stood at £11.8m (2016: £14.4m) primarily due to high, one off profits on property disposals in 2016.
Investment, modernisation and premiumisation have driven sales outperformance in underlying business with managed pubs like-for-like sales growth of 8.1%, and own beer volume growth of 3.9%, both substantially ahead of the market. Like-for-like tenanted EBITDAR was up 1.6%.
Fourteen pubs were acquired at a cost of £24.8m in the year including five from Village Green Restaurants and eight from EI Group plc, continuing the strategy of enhancing the quality of the estate. Proceeds of £5.9m have been raised from the disposal of 15 pubs.
Over five years, 22 pubs have been acquired and 49 sold, transforming the estate and driving average EBITDAR per managed pub up by 30.5%, and per tenanted pub up by 25.4%.
The company is contining investment of £10.7m across the estate to ensure every pub has high standards and a unique character with an attractive offer for customers.
Accommodation remains a key theme and an incremental revenue stream – occupancy is growing and now stands at 79% (2016:78%) and RevPAR4 at £66 (2016: £63).
New brand identity has been launched with a new website and pub signage, with 45 sites completed to date.
The first phase of the modernisation programme of the brewery is completed. New, premium British brands have been launched and costs streamlined to mitigate the impact of the Asahi contract termination in February 2018. Strategy to move to smaller and higher quality Brewing and Brands business are focused on own beers.
In the ten weeks to 2 September, like-for-like managed sales were up by 1.5% (2016: 8.2%) and total beer volume excluding contract was up by 4.4% (2016: +1.2%). In the 9 weeks to 26 August, like-for-like tenanted EBITDAR were up 0.6% (2016: +2.2%)
Jonathan Neame, Chief Executive, (pictured) said, “This has been a good year for the company with strong underlying performance and some great acquisitions that add real value to the company. We are pleased with the strategic and operational progress made in all areas of our business.
'We are mindful of the political and economic backdrop, but our strategic focus on investing for the long term, innovating and consistently delivering great pub environments and outstanding service for our customers will stand us in good stead.
'We remain confident that the actions that have been taken and our relentless pursuit of excellence will continue to deliver good long-term returns for our shareholders.”
