Shepherd Neame predicts supply chain challenges and inflation into 2022
Shepherd Neame, brewer, owner and operator of 310 pubs in Kent and the south-east, has said supply chain challenges and inflation costs will persist into 2022.
In the group's results for the 52 weeks ended 26 June 2021, it reported that Covid closures had hit revenues with total revenue for the year at £86.9m, down 26% on 2020 and 40% on 2019. Statutory loss before tax was £16.4m against a loss of £21m the prior year. No dividend was paid.
From 12 April to 16 May, when pubs had reopened, retail pubs achieved 62% of 2019 sales, and from 17 May to the year end on 26 June, when indoor trading had resumed, those same sites achieved 97% of 2019 sales.
The group said the start of the new financial year had been encouraging, with demand for food and accommodation strong since July. Drinks trade was recovering since the return to offices from September.
For the 18 weeks from 27 June to 30 October, same outlet like-for-like sales in retail pubs were 91% of 2019 and up 37% on 2020. For the 13 weeks to 25 September, same outlet like-for-like tenanted pub income was 93% of 2019 and up 26.2% on 2020.
Earlier this month, the company exchanged contracts to sell two hotels for £5.75m to RedCat Pub Company, which will complete this month. The group also reported that it had seen a 10% reduction in roles due to redundancies during the pandemic. Industrial action affecting logistics partner GXO, although averted, impacted supply for several weeks at a period of high demand, resulting in additional direct costs in the region of £250,000.
Jonathan Neame, chief executive of Shepherd Neame, said: "We face challenges ahead, particularly with supply chain and inflationary pressures. 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.
"We have a solid platform and a clear plan to build on our recovery, assisted by our strong balance sheet. For the rest of this year, we remain focused on meticulous cost control, tight cashflow management and further reducing net debt."
