Shepherd Neame nurses lockdown hangover but Britain’s oldest brewer says demand is getting back to pre-pandemic levels
- The brewer faced pre-tax losses of £4.2m in its financial year to 26 June
- Its 310 pubs were forcibly closed for 296 of the 421 days to 17 May
- But since July like-for-like sales are at 91% of 2019 levels and up 37% on 2020
Brewer and pub operator Shepherd Neame has suffered more than £4million in losses after Covid-19 restrictions rendered it unable to operate for much of the period.
Underlying operating pre-tax losses came in at £4.2million for the Kent headquartered firm’s financial year to 26 June.
Shepher Neame’s 310 pubs were forcibly closed for 296 of the 421 days to 17 May, when venues were allowed to reopen indoors, but demand is bouncing back for Shepherd Neame with like-for-like sales at 91 per cent of 2019 levels and up 37 per cent on 2020 in the 18 weeks to 30 October.
However, while conditions are improving for the brewer, it warned investors on Thursday that supply chain issues and inflation are likely to weigh on its performance in its 2022 financial year.
The firm’s 310 pubs were forcibly closed for 296 of the 421 days to 17 May, when venues were allowed to reopen indoors
The firm’s net asset value per share fell to £11.40 in 2021, down from £12.47 in the previous year, in response to Covid losses as well as regulatory changes.
But the pub brand highlighted its efforts to manage its net debt, which rose from £140.3million to £149.1million during the period.
From 26 June to 30 October, trade has been ‘encouraging’, the firm said, with ‘demand for food and accommodation, in particular,’ recovering strongly and drinks trade improving since the return to offices in London from September.
Like-for-like drinks sales were 76 per cent of 2019 levels and up 49.1 per cent on 2020, while food and accommodation sales surpasses 2019 levels.
It has also recently exchanged contracts to sell two hotels that ‘no longer fit our portfolio’ for £5.75million to RedCat Pub Company, which is expected to complete this month.
But CEO Jonathan Neame said while Shepherd Neame ‘looks forward to 2022 with optimism’ and ‘confidence’ that it can recover and improve post-pandemic, the firm faces ‘challenges ahead, particularly with supply chain and inflationary pressures’.
He added: ‘That said, we are confident that the long term fundamental drivers for the business remain strong, including the ongoing infrastructure investment in our heartland, anticipated local population growth, changes in consumer and workplace trends, and our position at the centre of the community.’
CEO Jonathan Neame says the company faces ‘challenges’ in 2022 from inflationary pressure and supply chain issues
In April, some Shepherd Neame pubs posted record sales last weeks as they reopened beer gardens after some Covid restrictions were listed, with most of its venues seeing revenues at or above 2019 levels.
Like most UK pub operators, the pandemic and associated restrictions proved costly for Shepherd Neame.
It fell to a £7.2million loss in the six months to 26 December, down from a £5.4million profit the year before, after turnover fell 30 per cent to £55.3million.
CEO Neame said: ‘We are greatly encouraged by the customer response since re-opening and are confident that beer and pubs remain every bit as core to British life as pre-pandemic.
‘We have spent the last year productively: building a better business, strengthening our brand presence and maintaining our pubs to be in optimal shape for reopening.
‘Our relationships with our licensees remain strong and we have few tenanted vacancies. We feel we are in the best shape we can be, in the circumstances, and this has resulted in a strong and sustainable recovery.’