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UK: Costs hit beer profit at Shepherd Neame

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Soaring input costs have caused a fall in full-year profit at Shepherd Neame, but the UK ale brewer said its beer brands remained "resilient" to a market downturn.

Net profit fell to GBP6.2m (US$10.9m) in the 12 months to 28 June, compared to GBP9.3m during the same period last year, said Neame today (8 October). Turnover crept up 1.7% to GBP101.7m.

Soaring input costs, particularly for malt, glass and energy, have put the group's brewery under significant pressure, the ale brewer and pub operator said.

"Raw material cost per unit has increased by 45% since 2005/6 and we will experience further substantial rises into 2009," it announced.

Neame's beer division remained resilient to tough market conditions in the UK throughout the year, the group added, however.

Import brand Asahi Super Dry grew volumes by 11%, and similar growth is expected in 2009, Neame said. Ale brand Bishops Finger grew by 8%, while flagship brand Spitfire saw volume sales on draught fall by 5%, but 500ml bottle sales grew by nearly 16%.

A general shift from on to off-trade in the UK beer market was highlighted by Neame's take home revenue rising by almost 15% for the year.

CEO Jonathan Neame said: "This has been as difficult a year as anyone in the industry can remember. We have had to contend with significant cost inflation at a time of weakening demand. These conditions are likely to persist into 2009.

"We remain naturally cautious about the coming year as the precise impact of cost pressures and consumer spending remains uncertain," he said, adding that the group remained confident of growth in the longer term.


Sectors: Beer & cider

Companies: Asahi Breweries

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