E-Malt.com News article: 4512

United Kingdom: Shepherd Neame Ltd, the Kent-based brewer and pub operator, announced on March 23 its interim results for the six months ended 25 December 2004. Company’s turnover up 2.1% to GBP47.5 million (half year 2003: GBP46.5m). Operating profit at GBP 5.9 million was unchanged after adjusting for exceptionals in 2003. Profit before tax up 8.4% to GBP 5.1 million (half year 2003 : GBP 4.7m). Earnings per share up 12.6% to 28.6p (half year 2003 : 25.4p). Strong growth in managed pub estate - like for like sales up 4.7%

Jonathan Neame, Chief Executive of Shepherd Neame, commented: "Shepherd Neame has had a solid six months of trading, particularly in the tied trade and our managed pub estate. We anticipate that the second half of the year will follow a similar trading pattern to the first half. Our core business is strong and we are confident that the significant investments made in the business over the past 18 months ensure we are in an excellent position to grow our pubs and brewing business as and when opportunities arise."

During the period the company has arranged refinancing of £37.5m of debt. “We have drawn £19m to replace the £10m term loan and overdraft and will draw the remainder on or before September 2006 upon the expiry of the Pubco debenture. The committed term loan facility is fixed at an interest rate of 6% for 20 years with no capital repayments for 15 years. It will generate substantial savings in interest payments when it replaces the Pubco debenture.”

The Directors have recommended a 5.6% increase in the interim dividend for the financial year ending 25 June 2005 from 3.6p to 3.8p on the £1 “A” ordinary shares and from 0.072p to 0.076p on the 2p “B” ordinary shares. The dividend will be paid on 7 April 2005 to the shareholders on the register on 24 March 2005.

Total beer volumes were down 1%, largely due to a review of our Spitfire business with J.D. Wetherspoon. “We were not prepared to reduce prices of Spitfire to maintain volumes, and as a result our sales to J.D. Wetherspoon reduced significantly during the period. However, sales of draught Spitfire to other customers increased by 20% and Spitfire in the take home trade increased by 8.7%. We are delighted to have been awarded the title of Kent Environment Business of the Year for 2004.”

Jonathan Neame, Chief Executive of Shepherd Neame, said: “We anticipate that the second half of the year will follow a similar trading pattern to the first half. Our core business is strong and we are confident that we are in an excellent position to grow our pubs and brewing business as and when opportunities arise.”

Jonathan Neame said he will be standing down as Chairman this year and Miles Templeman will be taking on the chairmanship following the AGM in October 2005.


27 March, 2005