UK: Shepherd Neame upbeat on beer, but charge hits FY profits
- Net profits drop by 31% to GBP4.4m (US$6.8m)
- Net sales rise by 5.2% to GBP121.3m
- Operating profits fall by 9.4% to GBP10.3m
- Beer volume sales continue momentum, up by 4% on previous year
Shepherd Neame reports mixed full-year trading
Shepherd Neame has again increased its full-year beer volumes in a shrinking UK market, but the group's profits fell due to an impairment charge its pub estate.
The Spitfire ale brewer reported beer sales up by 4% in volume for the 12 months to 25 June, continuing its momentum from the previous year, when volumes rose by 4.8%. The increase for Shepherd Neame's latest fiscal year came against an overall UK beer market that shrank by 17% in the same time period, the group said today (5 October).
Higher beer sales helped the brewer to increase net sales by 5.2% on the previous year, to GBP121.3m (US$186.6m). However, the firm's pub business ate into profits. A GBP1.9m impairment charge on the value of the pub business ensured that group operating profits fell by 9.4%, to GBP10.3m.
Net profits slid by 31% to GBP4.4m, although the figure was made to look worse by a one-off gain of around GBP1.9m on the sale of property in the previous year.
Shepherd Neame said that trading in its current fiscal year so far has been positive, with beer volumes up by 7% for the 12 weeks to 17 September. "However," said group CEO Jonathan Neame, "we are experiencing some margin pressure in our beer business."
He added: "The general economic and industry outlook remains challenging as we face the twin issues of decline in consumer incomes and inflation in our cost base."
For the company's announcement, click here.
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