Bad weather leaves Shepherd Neame profits flat

Kent-based brewer and pub owner Shepherd Neame said that factors including “unremittingly wet and dull weather” caused its profits to remain level for the first half of the 2012-13 financial year.

The brewer reported its operating profit level to be £6.7 million, which mirrored the same period as last year, while its statutory profit before tax fell slightly to £4.5m, from £4.8m in 2011-12.

Turnover rose slightly to £69.2m, a 2.6% increase on the previous year’s £67.4m.

The brewer said that as well as the bad weather the much-anticipated boost to tourism from the London 2012 Olympics did not materialise, which contributed to “particularly challenging” market conditions. But it added that strong Christmas trading had helped, which reflected recent news that pub sales increased in December.

Chief executive Jonathan Neame, said: ”I am pleased to report a solid performance for the 26 weeks to 29 December 2012 with robust Christmas trading following the exceptional comparable period in 2011.

“Our performance reflects the underlying strength and resilience of our business as we have invested consistently in our brands and pubs over the long term.”

In its results the brewer highlighted that there were some plus points despite the difficult conditions, with managed house like-for-like sales up 2.9%, liquor sales up 2.4%, food up 3.5% and accommodation up 5.8%.

Chairman Miles Templeman, said: “Recent market conditions have been particularly challenging with industry On Trade beer sales down 4.7% for the 12 months to the end of December 2012 and Off Trade sales down 7.5% in the final quarter.

“Factors that have contributed to this are unremittingly wet and dull weather, disappointing trade during August, as the much anticipated boost to tourism from the London 2012 Olympics did not materialise, and increasing caution from the consumer as the economy continues to falter.

“In the face of these conditions our performance reflects the underlying strength and resilience of our business as we have invested consistently in our brands and pubs over the long term and have continually driven to improve our offer and level of service.”

Shepherd Neame owns 353 pubs, with 307 tenanted or leased, and 46 managed, and Templeman added that while the brewer is encouraged that some brands are growing, it does expect more challenges in 2013.

He said: “We are encouraged by the continued growth in retail sales and excited about the sales potential arising from the plans for Spitfire, Asahi Super Dry and our other key brands.

“We expect to continue to face the challenges of a weak economy, low consumer confidence and further cost inflation for the rest of 2013. We continue to take steps to improve efficiency and reduce cost so as to strengthen the business and remain competitive for the future.”