Shepherd Neame, a renowned pub group and brewer, has reported a noteworthy increase in sales and profits despite a decrease in the volume of beer sold over the past year. The Kent-based company disclosed that it deliberately moved its beer business further away from retailers like supermarkets, leading to a notable drop in sales volumes. Nonetheless, its strategic focus on pubs has yielded positive results, with drinking habits normalising post-pandemic and amidst cost-of-living pressures.
The firm, which boasts around 1,800 employees, announced a 3.6% revenue growth to a record £172.3 million for the year ending on June 29, compared to the previous year. This growth was predominantly attributed to strong performances in London venues and its tenanted pub sector. Shepherd Neame, with 291 pubs under its operation by the end of the year, saw a 4.9% rise in total like-for-like sales across its pub estate, driven by a notable 7.2% increase in drink sales.
Pubs situated within the M25 region experienced a significant 14.5% surge in like-for-like sales, buoyed by the return of more office workers contributing to the sales uplift. However, the brewer of iconic brands like Spitfire and Bishops Finger noted an 11.8% decrease in total beer volumes, leading to a 7.4% dip in revenues from its brewing and brands segment. Despite this, profits from the beer business saw growth as the company shifted its focus from off-trade to on-trade customers, such as pubs and hospitality venues.
Shepherd Neame disclosed that its group pre-tax profits soared by 38.1% to £6.8 million for the year. Jonathan Neame, the Chief Executive of Shepherd Neame, expressed confidence in the company’s prospects, stating, “We have great beers and pubs, a strong balance sheet, and a well-balanced, cash-generative business. We are optimistic about the consumer outlook and are well positioned for the future, notwithstanding the ongoing cost headwinds we face.”
This positive outlook comes on the heels of Shepherd Neame’s deliberate shift in its business strategy, highlighting the resilience and adaptability of the company in navigating evolving market conditions.