City snapshot: Record sales as Shepherd Neame shifts focus away from off-trade

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Britain’s oldest brewer Shepherd Neame has posted record revenues and a “good” uplift in profit as it pivoted away from the off-trade to focus on its pubs.

The group, which own almost 300 sites across Kent and the Southeast, was boosted by its estate of London pubs in the 53 weeks to 29 June.

Revenues increased 3.6% to £172.3m, with like-for-like sales up 4.9%. Like-for-likes sales inside the M25 jumped by 14.5%, while outside London growth was a more modest 1.1%.

Total beer volume at the brewer declined 12%, while own brewed volume sank by 17.2% as Shepherd Neame moved away from lower margin off-trade business to concentrate on its pubs.

Divisional revenue in brewing and brands fell 7.4% to £52.7m as a result, underlying operating profits in the division improved to £1.6m.

Pre-tax profits at the group rose by 38% to £6.8m in the year.

CEO Jonathan Neame said the group had seen further good progress in all three divisions.

“We have great beers and pubs, a strong balance sheet and a well-balanced and cash-generative business,” he added.

“We have a strong pipeline of pub developments and new opportunities in our heartland on-trade. We are optimistic about the consumer outlook and are well positioned for the future, notwithstanding the ongoing cost headwinds we face.”

Chairman Richard Oldfield said: “We have seen a strong bounce-back in London, which has happened faster than many expected. In time, we hope that this level of activity will spill out into our region.

“There is good reason to believe that, with net disposable income growing and interest rates starting to fall, consumer confidence will improve over the next couple of years.

“Historically these favourable conditions have resulted in more footfall to our pubs. Add a little sunshine and most of our businesses should do well.”

Morning update

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The MACH Certification program is designed to give enterprises confidence they are choosing best-in-class vendors that can deliver future-proof technology.

CEO Tim Mason said: “”Ensuring our technology can integrate with other best-in-class vendors has been a strategic priority for Eagle Eye and we are, therefore, delighted to achieve this certification from such an important industry organisation.”

Agricultural supplies group Wynnstay has warned its annual results will be materially lower than current market expectations and lower than the previous financial year.

The business said it had faced “challenging conditions” in seasonally important months.

The two main factors behind the shortfall are the underperformance of the feed division and of the fertiliser blending operation.

Wynnstay added in the trading update that the board expected a better outlook for the livestock and dairy sectors in the long-term and the financial performance of the group should improve next year.