Shepherd Neame says recent trade ‘encouraging’ as it reports record full-year revenue: Kent brewer and retailer Shepherd Neame has said recent trade has been “encouraging” as the business reported record full-year revenue, but added significant inflationary pressure has increased costs across the business. For the 13 weeks to 23 September 2023, retail like-for-like sales (72 pubs) were up 5.6% on last year. Like-for-like tenanted pub income (217 pubs) for the nine weeks to 26 August 2023 was up 3.0% on last year. Total beer volume for the 13 weeks to 23 September 2023 was down 10.3% versus 2022. Own beer volume was down 15.9% versus 2022. The company stated: “The hospitality sector has faced an unprecedented series of crises in the last three years. We still have known cost increases to absorb, but the dust is settling, the outlook is more positive and the fundamentals of the business are good. Consumer spending has remained resilient all year, better than many had expected, and better than many other parts of the retail and consumer economy. People are prioritising going out over other types of expenditure. Pubs are generally performing better than restaurants. Premium and neighbourhood pubs are performing well. We have an excellent pub estate with considerable potential, a loyal customer base, and a high profile within the individual communities we serve. Shepherd Neame pubs have been performing in line with the best in the sector. All of which gives us confidence even if we go into a new phase of pressure on household budgets, as mortgage rates increase. We do face considerable inflationary and market challenges within our Brewing and Brands business, but, notwithstanding the inflationary pressures, we have a strong core of loyal and happy customers. After the wonderful June 2023 weather, wet, cool and windy conditions returned in July and August. This period compares with the record-breaking sunshine and heat in July 2022. Inevitably trade at our coastal sites has suffered somewhat, but was boosted by warm weather in early September. Nonetheless, trade has remained encouraging in our pubs, albeit the beer market remains challenging.” It comes as the business reported revenue increased 9.7% to a record £166.3m for the 52 weeks ending 24 June 2023 (2022: £151.5m). Underlying profit before tax was up 3.8% to £7.6m (2022: £7.3m). Retail like-for-like sales were up 12.9% on last year. Retail like-for-like sales inside the M25 were up 30.6%, driven largely by increased momentum in the return to offices. Outside the M25 like-for-like sales were up 6.6% versus last year. Food like-for-like sales were up 3.1% versus last year, drink like-for-like sales increased 22.4% and accommodation like-for-like sales (248 rooms) were down 4.2%. Like-for-like tenanted pub income was up 3.9% on last year. During the period the business transferred six tenanted pubs to retail, and two to investment property. It sold eight properties, including six pubs and two investment properties (six freehold disposals and two leases surrendered) and acquired four pubs (three freehold pubs and one leasehold). These disposals have realised net proceeds of £2.3m (2022: £9.1m). The business invested £17.2m in total, including £6.7m in new site acquisitions, including fees, and £10.5m in brewery and pub investments, of which the major projects have been £1.4m at the Crown at Chislehurst and a further £0.5m for partial completion of works at the Duke of Cumberland in Whitstable. Chief executive Jonathan Neame said: “Demand has been strong all year with recent trade in our pubs encouraging. We have a loyal customer base, a high profile within the communities we serve, and we have an ambitious investment programme ahead. The turmoil of the last few years is now settling and the outlook is positive. We have much to look forward to. The balance sheet remains strong and the business has momentum in our pipeline of investment. We are confident we have the team and skills to deliver good returns for our shareholders over the long term.”