Shepherd Neame Ltd - Announcement of Full Year Results London Stock Exchange
RNS Number : 8747Z
Shepherd Neame Limited
23 September 2015
 



 

 

 

 

23 September 2015

SHEPHERD NEAME LIMITED

ANNOUNCEMENT OF FULL YEAR RESULTS

 

Shepherd Neame, Britain's oldest brewer, today announces results for the 52 weeks ended 27 June 2015.

 

Financial performance:

 

-      Successful year with record operating profit

-      Turnover down 0.3% to £138.3m (2014: £138.7m) as we concluded the phased exit from contract brewing

-      Operating profit before exceptionals up +5.1% at £14.1m (2014: £13.4m)

-      Profit before tax and exceptional items up +9.4% to £9.6m (2014: £8.8m)

-      Statutory profit before tax up +22.1% to £9.4m (2014: £7.7m)

-      Basic earnings per share up +17.2% to 49.1p (2014: 41.9p) and basic earnings per share before exceptional items up +3.7% to 50.3p (2014: 48.5p)

-      Proposed final dividend per share up +3.1% to 21.4p (2014: 20.75p) making total dividends for the year of 26.7p (2014: 25.9p)

 

Operational highlights:

 

-      Strong performance across our pub estate

-     Like-for-like managed pub and hotel sales up +6.1%, with liquor up +4.3%, food up +7.0% and accommodation up +13.8%

-     Average EBITDAR1 per managed pub up +7.1%

-     Like-for-like tenanted EBITDAR up +2.4%

-     Average EBITDAR per tenanted pub up +4.1%

-      Core own and licensed beer volumes (excluding contract brewing) up +0.1%: with strong growth from the Whitstable Bay range and Samuel Adams Boston Lager

 

1 Earnings before interest, tax, depreciation, amortisation and rent payable

 

Current trading:

 

-      In the 10 weeks to 5 September like-for-like sales in Managed pubs and hotels are up +6.5% and like-for-like EBITDAR from Tenanted pubs to 29 August is up +1.8%

-      Core own and licensed beer volumes (excluding contract brewing) to 5 September up +8.6%

 

Jonathan Neame, Chief Executive, commented:

 

"This has been a successful year for the Company with positive evolution of our strategy and a strong financial performance. We have built a high-quality asset base over a long period of time and this year have made a number of exciting new additions to our beer and pub portfolios. Whilst the industry remains very competitive we are confident that we have a robust strategic, geographic and financial base from which to continue to grow."

 

 

For further information, please contact:

 

 


Shepherd Neame Limited



Jonathan Neame, Chief Executive

Mark Rider, Finance and IT Director

Tel: 01795 532206

 


 

Kreab


Marc Cohen / Christina Clark

Tel: 020 7074 1800


 

Regional and Trade Media Contact:



John Humphreys

Tel: 01795 542051

 

Note: The Directors of Shepherd Neame Limited accept responsibility for this announcement.



NOTES FOR EDITORS

 

Shepherd Neame is Britain's oldest brewer. Established in 1698 and based in Faversham, Kent it employs around 1,200 people.

 

The Company retails its own beers, on draught and in bottles, under a range of highly successful brand names, including:

 

-      Spitfire: One of the leading premium bottled ales in the UK with national distribution on draught (4.2% abv) and in bottle (4.5% abv). Spitfire Gold, a golden ale (4.1% abv), has been launched to mark the 75th anniversary of the Battle of Britain.

 

-      Whitstable Bay: This range, sold under the Faversham Steam Brewery brand, includes a Pale Ale on draught (3.9%) and in bottle (4%), an Organic Ale (4.5%), Blonde Lager (4.5%) and Black Oyster Stout (4.2%).

 

-      Bishops Finger: Connoisseur premium ale (5.4% abv).  

  

-      Master Brew: The 'Original Kentish Ale' is a well-hopped cask ale (3.7% abv).

 

The Company also brews lagers under license, including:

 

-      Asahi Super Dry: Japan's number one beer (5% abv), which is produced under an exclusive UK license for brewing, sales and marketing.

 

-      Samuel Adams Boston Lager: Number one US craft lager (4.8% abv) brewed under an exclusive license from the Boston Beer Company. The Company also imports Rebel IPA, a strong hopped US craft beer (6.5% abv) and Angry Orchard, America's No. 1 Hard Cider (5%).

  

Shepherd Neame sold 261,000 brewers' barrels of beer (75.1 million pints) including 224,000 brewers' barrels of own brewed beer (64.6 million pints) in the last year. The majority of these sales were made in the UK although the Company also exports to more than 35 countries.

 

At the year end, the Company operated 338 pubs in the South East, of which 286 were tenanted or leased and 52 managed. The pub estate ranges from inns and hotels to destination dining, great traditional and local community pubs. 

 

Shepherd Neame's shares are traded on the ISDX Growth Market. See http://www.isdx.com/ for further information and the current share price. 

 

For further information on the Company, see www.shepherdneame.co.uk.



CHAIRMAN'S STATEMENT

 

Overview

I am pleased to report another successful year for the Company for the 52 weeks to 27 June 2015. We have continued the positive evolution of our strategy whilst also achieving record operating profit, strong cash flow generation and further debt reduction.

 

During the period the economy has grown, consumer confidence spread and employment increased. We have also seen further momentum in the regeneration of East Kent and its Coastal Towns and renewed confidence in the local property market.

 

The momentum that we have built in our managed and tenanted pub businesses has been maintained as we continue to invest, build our support services and focus on improving and raising the standards of our offer to customers.

 

During the year we have completed the current phase of investment in developing our hotels with the redevelopment of the Royal Wells Hotel, Tunbridge Wells. We are pleased with the progress of all these sites which have contributed to our strong growth in food and accommodation sales.

 

Growth has been harder to achieve in our Brewing and Brands Business as we concluded the phased exit from the Kingfisher lager contract. Overall volume and turnover in this area fell but we have achieved modest growth in own and licensed beer volumes, adjusted to exclude contract volume, in a difficult market.

 

Turnover was £138.3m (2014: £138.7m), down -0.3%. Operating profit before exceptionals grew by +5.1% to £14.1m (2014: £13.4m) and operating margin before exceptionals was up +0.5% to 10.2% (2014: 9.7%).

 

In 2014 the Company incurred an exceptional charge of £1.2m for the costs associated with a business and board reorganisation and share capital reorganisation as communicated in last year's results. No further costs were incurred on these items in 2015.

 

We have recognised a net exceptional charge of £0.2m (2014: credit of £0.1m) in relation to property items.

 

Profit before tax and exceptionals is £9.6m (2014: £8.8m) up 9.4%. Statutory profit before tax after recognising exceptional items is £9.4m (2014: £7.7m), up 22.1%.

 

Basic earnings per 50p ordinary share (EPS) is 49.1p (2014: 41.9p) up 17.2% and basic earnings per 50p ordinary share before exceptional items is 50.3p (2014: 48.5p), up 3.7%.

 

Dividend

In line with the Board's stated dividend policy post the share capital reorganisation in 2014, we intend to grow the dividend rate payable to all shareholders with a view to target dividend cover in the region of two times basic EPS pre-exceptional items. The Board is proposing a final dividend of 21.40p (2014: 20.75p), making the total dividend for the year 26.70p (2014: 25.90p), an increase of 3.1%. This represents a dividend cover pre-exceptional items of 1.9 times (2014: 1.9 times). The final dividend will be paid on 16 October 2015 to shareholders on the register at the close of business on 9 October 2015.

 

Advisors

Charles Stanley Securities, which provided corporate advisory and stockbroking services to the Company and the Board, has been acquired by Panmure Gordon (UK) Limited which has now taken on this role and will provide investor research on the Company.

 

Accounting standards

This year will be the last that the Company prepares the Financial Statements under current UK GAAP accounting rules. A new framework in the UK became effective on 1 January 2015 and the Interim Results will be reported under the accounting standard, FRS 102, in March 2016. There will be a number of substantive changes arising from this and we will explain the impacts in conjunction with those results.

 

Refinancing

Since the year end we have taken advantage of the improved rates available in the market to refinance our medium-term loan facilities and, in line with our strong cash flow and lower debt levels, have created a more flexible debt structure going forward.

 

The five year term loan and revolving credit facility due to expire in May 2017 have been replaced with a £20m revolving credit facility through to September 2020, with the option to extend by a further £10m during that time, should the need arise.

 

The existing £60m term loan remains unchanged and matures in 2026. Excluding the overdraft, the Company now has total medium and long-term committed credit facilities of £80m.

 

Land at Queen Court, Ospringe

The Company owns 54 acres of land and buildings on the edge of Faversham as the remaining part of the Company's farming business. During the year planning permission for residential dwellings on 10 acres of land on Brogdale Road was achieved and this land is currently being marketed for disposal.

 

Government and regulation

In his final Budget of the last Parliament, the Chancellor again delighted the industry with a 1p per pint cut in excise duty for an historic third year in a row. This has begun to restore confidence in the sector, increase investment and encourage job creation, all helping to undo the damage caused by the so-called beer duty escalator introduced in 2008. However, beer production in the UK remains heavily taxed compared to other EU countries.

 

In the first Budget of the new Parliament the Chancellor announced an increase in the threshold for businesses to pay National Insurance as well as a review of business rates which we hope will be beneficial to small pubs.

 

In addition, he announced the introduction of the National Living Wage. This will be introduced in April 2016 and increase through to 2020. We do not expect the impact in 2016 to be material.

 

During the year the Small Business, Enterprise and Employment Bill completed its passage through Parliament. This long-running debate on the letting and operation of tied pubs is now drawing to a close, although there is still secondary legislation to be agreed. As anticipated, Shepherd Neame is exempt from this legislation as we operate fewer than 500 tenanted or leased pubs. We will continue to support the voluntary code of practice to ensure the transparency and openness of our tied agreements.

 

Summary

This has been a strong year for the Company. We have maintained our good trading momentum and developed and refined our strategy so that we have clear aims and objectives that are communicated across the business.

 

We remain naturally cautious of economic and legislative factors which may impact the business and our sector and so reduce consumption levels or pub footfall. The introduction of the National Living Wage will provide a cost challenge in due course.

 

However, we believe we have the skills to manage these risks, the ambition to seek new opportunities and a strong pipeline of investment potential within the existing asset base to grow the Company.

 

Miles Templeman

Chairman

 



 

CHIEF EXECUTIVE'S REVIEW

 

Overview

I am pleased to report an excellent year for the Company with strong financial performance combined with good progress against our strategic objectives.

 

The changes we have made in the business in recent years have now been fully embedded and this has enabled us to focus on operational excellence and driving higher returns from existing assets.

 

Three key trends are influencing our strategy development. Firstly, the popularity of eating out and overnight trips in recent years has continued. The consumer has more spending power but remains conscious of value for money and demands a great experience every time they visit an outlet. Pubs, casual dining in restaurants and coffee bars are all competing for spend from the same customers who have time pressure and increasing choice of outlets to meet their needs.

 

Secondly, the beer market has continued to struggle for volume growth and declined by -2.4%2 for the year to June 2015 (2014: +3.8%). Within this the on trade experienced marginally steeper decline than the off trade and is now less than half the market. Recent consumer trends towards beers with greater taste and flavour, or local beers with authenticity and provenance, have continued.

 

The third dynamic influencing the Company strategy is that, at last, economic recovery is being felt outside London, and we are now seeing ever-increasing signs of regeneration in our heartland, in particular, in North Kent and the East Kent coastal towns. There is increasing momentum behind the major development zones in our region and over the medium term this could bring greater economic prosperity and new opportunities for us to grow.

 

2 Source: The British Beer & Pub Association

 

Tenanted and Managed Pub Operations

Overview

At the year end we operated 338 pubs and hotels (2014: 347) of which 295 are freehold (2014: 302). Of these 52 (2014: 48) were managed at year end and 286 (2014: 299) were tenanted or leased.

 

We have pursued a consistent strategy to drive footfall to our pubs and attract and retain the best licensees through improving the quality of our pub estate and growing the mix of our retail business. We continue to maintain strong liquor businesses and to increase our investment in food and accommodation.

 

Thanks to active property management we have, in the last 5 years, acquired 14 pubs and disposed of 41. This has reduced the number of small wet-led community pubs and transformed the profile, location, quality and sustainability of our asset base. Over this period the average EBITDAR per tenanted pub has increased by +17.5% and per managed pub +58.5%.

 

Our primary acquisition focus is to seek economic single-site opportunities within our heartland if they improve the overall business or reach new markets, but we increasingly review opportunities outside our historic trading area. We are looking to acquire sites with unique character in landmark or high footfall locations and with the potential for further development.

 

During the year we acquired two new pubs; the Ostrich at Colnbrook, near Heathrow, one of the oldest pubs in England, reportedly built in 1106, and the Inn on the Pond in Nutfield, Surrey. Both of these are being operated as managed pubs. We plan redevelopment of The Ostrich to add letting accommodation. We have also acquired the freehold of an existing pub, the Lock and Barrel, Frinton-on-Sea, which was leasehold and operates as a tenanted pub.

 

Since the year end we have acquired two further outlets to be operated as managed pubs. The Minnis Bay Bar and Restaurant and the Anchor, Hampstead Lock, Yalding are both in exceptional locations overlooking the sea or river respectively, and take the managed estate to 54.

 

In 2015 we have raised gross proceeds of £3.2m (2014: £2.2m) from the disposal of 11 pubs (2014: four pubs), and one unlicensed property (2014: three unlicensed properties) and other assets. This realised a profit of £0.2m (2014: £0.2m). We have also transferred three tenanted pubs (2014: one) to our managed estate and one pub from managed to tenanted.

 

Driving footfall to our pubs

We have continued to look to drive footfall and the quality of customer experience through improving the internal and external appearance of our pubs and as a result have increased investment levels, excluding acquisitions, year on year for five years.

 

We have invested £12.0m (2014: £7.4m) in developing the pub estate of which £3.4m (2014: £0.3m) was on new acquisitions, £6.5m (2014: £5.1m) on development and maintenance capex and a further £2.1m (2014: £2.0m) on repairs and decorations.

 

In order to facilitate the acceleration in investment levels we are recruiting two new surveyors and have enhanced our planned maintenance strategy.

 

Major redevelopments this year included our largest ever project at the Royal Wells Hotel, Tunbridge Wells which provides 27 bedrooms, two function rooms, bar and dining facilities. The investment of £2.4m in 2015 has created a superb and stylish venue. This builds on the success of the redevelopments at the Botany Bay Hotel and the Marine Hotel in recent years.

 

In the tenanted estate, we have carried out major redevelopments at the Railway Telegraph, Forest Hill, the Abbey Hotel, Battle and the Six Bells, Cliffe as well as many smaller projects and matched investment schemes with our licensees.

 

In order to enhance the customer experience and profile of our outlets, we continue to invest in technology and digital marketing. Specifically we have rolled out new till systems and room reservations systems, both of which drive speed of service, faster check-in and improved customer engagement. We are currently undertaking major improvements to our pub websites to enhance the photographic quality and make them mobile responsive. Furthermore, given the increasing amount of function and wedding business we provide, we have launched a new website to market the wedding venues across our estate. We have expanded our mystery visitor programme to all tenanted and managed pubs.

 

Providing a distinctive range of complementary products

Accommodation in our managed business has been the fastest area of growth in recent years as we carry out major redevelopments of our hotels. We continue to add or refurbish our rooms on a regular basis, to a very high specification and with stylish design. During the year we refurbished 68 bedrooms which takes total rooms in the managed estate to 279 (2014: 271). Occupancy during the year was again strong at 78% (2014: 76%) and RevPAR3 up +11.5% to £58 (2014: £52). We have a good pipeline of opportunities to add further rooms across the business over the next two years and we are working with Visit England to develop letting rooms for accessible tourism.

 

Our food offer continues to provide strong growth. In the managed estate, footfall from diners has increased by +9.6% (2014: +8.3%) and spend per head by +0.3% (2014: +2.2%) to £11.51 (2014: £11.48). We have entered new long-term agreements with our core food suppliers which will help further menu development and control of costs. We have launched a new scheme for personal and skills development for Head and Second Chefs and demand is growing strongly from our tenanted licensees for training courses and menu advice from our food development team.

 

Every year we look to expand our complementary customer offer. Last year we focused on driving an enhanced coffee offer across our pubs. In 2015 our mineral range has been improved with premium flavoured carbonates from local producer, Kingsdown Water. In addition our wine range has grown with a new relationship with an Australian family producer, Yalumba, who also produce our private label Boonaburra. Finally our premium spirits offer has been enhanced to exploit the increasing popularity of English gin and other craft spirits.

 

3 Revenue Per Available Room

 

Attracting, retaining and developing the best people

Attracting the best people to work in the brewery and our pubs is fundamental to our business. In the last year we have reviewed and developed our licensee recruitment process and introduced a comprehensive new induction process. We have recruited additional Business Development Managers in the tenanted and managed estates to enable these teams to have greater focus on a smaller number of pubs.

 

To enhance customer service levels, we have developed a mobile responsive e-learning system that covers all staff induction manuals, and provides the platform to develop further skills areas for our pub staff. We have recruited additional trade quality advisors and are also recruiting more field trainers to ensure the highest standards of quality of beer dispense. Across the business we have engaged in a programme to improve communication and awareness of the Company's strategy, aims and objectives.

 

The above initiatives help to support personal development and provide more focus on service levels to the customer. Satisfaction levels and retention rates from our licensees remain high.

 

We like to reward achievement at the brewery and pubs for long service and conspicuous effort. I would like to congratulate all of the year's winners but, in particular, Sarah and Graham Firth of the Three Lions, Farncombe for their efforts in creating a superb welcome and great experience for their customers. Also, of special note, is the continued excellence of Phil and Steve Harris, licensees at the Sportsman at Seasalter, now voted the No.1 Gastro Pub in the UK4.

 

4 Budweiser Budvar Top 50 Gastropubs Awards

 

Trading performance

As a consequence of these initiatives, investment, and long-term commitment to continuous improvement, trading in our pub estate continues to grow year on year.

 

Tenanted estate revenues grew by +0.6% (2014: +2.2%) for the 52 weeks to 27 June 2015. Like-for-like EBITDAR per tenanted pub grew by +2.4% (2014: +4.4%). Average EBITDAR per tenanted pub grew by +4.1% (2014: +5.9%).

 

Managed estate revenues grew by +9.4% (2014: +10.8%). Same outlet like-for-like sales were up +6.1% (2014: +8.9%) with liquor +4.3% (2014: +8.0%), food +7.0% (2014: +10.4%) and accommodation +13.8% (2014: +9.7%). Average EBITDAR per managed pub is up +7.1% (2014: +13.9%).

 

Brewing and Brands

Overview

This has been another transitional year for the Brewing and Brands business with good portfolio development and excellent performance from our newer brands offset by the continuing impact of the exit from the contract for brewing Kingfisher lager.

 

Total own brewed beer sold was -8.4% (2014: -0.3%) at 224,000 brewers' barrels (2014: 245,000 brewers' barrels). This decline on the prior year is accounted for by reduced Kingfisher volume. We have been making a phased exit from this substantial contract since 2013 and the production of kegged Kingfisher beer ceased in December 2014. Total Kingfisher volume in this financial year represented 6.1% (2014: 13.5%) of own produced beer volume. Core own and licensed beer volume adjusted to exclude contract volume increased by +0.1% (2014: +6.1%) with growth ahead of the market against the backdrop of ever-increasing competition from new micro and craft brewers.

 

Our strategic objectives remain to create demand and build awareness for our portfolio of premium brands, instil a passion for quality, and drive continuous innovation and great marketing.

 

Creating demand and building awareness for our brands

In response to the fast-changing nature of the UK Beer Market, we launched in 2014 and 2015 a number of new initiatives to strengthen our beer portfolio.

 

The Whitstable Bay range under the Faversham Steam Brewery banner has been a huge success and significantly outperformed our expectations. Pale Ale and Blonde Lager in particular have become key products in our own pubs and have a growing presence in national markets. The portfolio was enhanced during the year with Whitstable Bay Oyster Stout which has had an excellent start. Total growth in the Whitstable Bay range was +39.6%.

 

Our heritage beers, including Classic Collection beers such as Brilliant Ale, Double Stout and IPA, as well as the more widely distributed Bishops Finger, have also performed well with growth of +4.1%.

 

During the year Master Brew has been re-launched with an attractive new brand identity that emphasises its tradition as a classic dry hoppy beer from 'The Home of the Hop'.

 

This year marks the 75th Anniversary of the Battle of Britain. To recognise this event, we are supporting a number of activities and events as well as launching Spitfire Gold, a light golden ale at 4.1% ABV, to take advantage of the trend towards lighter, paler and more aromatic ales. Spitfire has had a challenging year and volumes declined by -15.5% partly through reducing our participation in promotional activity in the supermarkets as the grocers face significant competitive pressures.

 

In spite of these market pressures both Spitfire and Bishops Finger remain Top 10 performers in the Premium Bottled Ale category. It is also pleasing to note that our Spitfire TV adverts in 2014 have won a Beer Marketing Award for the Best Broadcast Advertising Campaign.

 

Our licensed portfolio has continued to perform well with good momentum for Asahi Super Dry and strong growth of +23.8% from Samuel Adams Boston Lager which has gained some excellent high-profile distribution in the on trade. To complement Boston Lager we are now importing further products from the Samuel Adams range including Rebel IPA, a strong hopped US Craft Beer, and Angry Orchard, America's No.1 Hard Cider.

 

This emerging new portfolio is providing some exciting opportunities for the Company and enables us to offer a compelling range to pubs, bars and restaurant groups.

 

Expanded Customer Reach

Following the decision to transfer warehousing and distribution to Kuehne & Nagel Drinks Logistics (KNDL) in October 2013, we have reorganised our sales team to provide wider geographic coverage and greater density. Early indications from this approach are encouraging.

 

Simultaneously we are extending our reach internationally and have opened up new markets in Hong Kong, Australia and Poland. We have enjoyed good growth in France, Italy and Ireland. However, our ambitions in North America with Moosehead have failed to meet expectations and this agreement terminates in October 2015. We are seeking new distributors for these markets.

 

To support the consolidation of sales and marketing and production into one business unit, we have reorganised our office facilities and transferred customer services back to the central brewery site. In the coming year we have embarked on a project to roll out a customer relationship management system across the business.

 

Operations

In April 2015, the 40 year agreement to discharge our trade effluent to a local facility came to an end. The water treatment plant is now fully operational with cleansed water being discharged to the Faversham Creek under consent from the Environment Agency. Costs this year have been in line with expectations.

 

Our investment focus in the coming year is to upgrade the Brewhouse and modernise quality systems and procedures. It was pleasing to note that Samuel Adams Boston Lager brewed by us won Gold at the International Brewing Awards.

 

Current trading

We have made a good start to the new financial year and our new or refurbished outlets have performed well.

 

For the 10 weeks to 5 September 2015 like-for-like managed sales are up +6.5% (2014: +4.1%). Like-for-like EBITDAR in the tenanted estate to 29 August 2015 is up +1.8% (2014: +2.6%). Total beer volume is down -3.8% (2014: -13.5%) with own beer volume excluding contract up +8.6%.

 

Summary

This has been a positive year for the Company with strong financial performance and exciting new additions to our beer and pub portfolio.

 

We focus on delivering a great and memorable experience for our customers every time they drink our beer or visit one of our unique and distinctive pubs and hotels, and, as a result, the Company continues to enjoy a strong reputation.

 

We have built a high-quality asset base over a long period of time and we are now getting improved returns from developments and good operating performance.

 

Whilst the industry remains very competitive at all levels, we are confident that we have a robust strategic, geographic and financial base from which to continue to grow.

 

Jonathan Neame

Chief Executive

 



 

Profit and loss account

52 weeks ended 27 June 2015

                                                                                                                



52 weeks to 27 June 2015

52 weeks to 28 June 2014



Before

exceptional items

Exceptional items

Total

Before exceptional items

Exceptional items

Total


note

£'000

£'000

£'000

£'000

£'000

£'000

Turnover

1

138,267

-

138,267

138,679

-

138,679

Operating charges


(124,177)

(375)

(124,552)

(125,278)

(1,279)

(126,557)

Operating profit


14,090

(375)

13,715

13,401

(1,279)

12,122

Profit on sale of property


-

201

201

-

224

224

Profit on ordinary activities before interest


14,090

(174)

13,916

13,401

(1,055)

12,346

Interest receivable and similar income


14

-

14

25

-

25

Interest payable and similar charges


(4,502)

-

(4,502)

(4,647)

-

(4,647)

Profit on ordinary activities before taxation


9,602

(174)

9,428

8,779

(1,055)

7,724

Taxation

2

(2,171)

-

(2,171)

(1,622)

76

(1,546)

Profit after taxation


7,431

(174)

7,257

7,157

(979)

6,178

Earnings per 50p ordinary share








Basic

4



49.1p



41.9p

Basic before exceptional items

4



50.3p



48.5p

Diluted

4



48.8p



41.6p

 

Statement of total recognised gains and losses

There are no recognised gains or losses other than the profit attributable to the shareholders of the Company of £7,257,000 for the 52 weeks ended 27 June 2015 (52 weeks ended 28 June 2014: £6,178,000).

Note of historical cost profits and losses


52 weeks ended

52 weeks ended


27 June 2015

28 June 2014


£'000

£'000

Profit on ordinary activities before taxation

9,428

7,724

Realisation of property valuation

955

103

Difference between an historic cost depreciation charge and the actual depreciation charge for the year

29

29

Historical cost profit on ordinary activities before taxation

10,412

7,856

Historical cost profit for the year retained after taxation

8,241

6,310

 

 

 

 

 

 

 

 

 



Balance sheet

As at 27 June 2015

 


27 June 2015

28 June 2014

£'000

£'000

Fixed assets






Tangible fixed assets

204,468

201,591

Investments and loans

816

1,073





205,284

202,664 

Current assets

Stock




7,001

6,417

Debtors




16,150

18,202

Cash




6,793

5,981





29,944

30,600

Creditors: amounts falling due within one year



Bank loans and overdrafts

(1,987)

(1,987)

Creditors

(23,919)

(23,477)





(25,906)

(25,464)

Net current assets

4,038

5,136

Total assets less current liabilities

209,322

207,800

Creditors: amounts falling due after more than one year



Bank loans

(73,616)

(75,463)

Provision for liabilities

(3,556)

(3,586)

Net assets

132,150

128,751







Capital and reserves



Called up share capital

7,429

7,429

Share premium account

1,099

1,099

Revaluation reserve

12,170

13,125

Reserve for own shares held

(827)

(908)

Profit and loss account

112,279

108,006

Equity shareholders' funds

132,150

128,751

These accounts for Shepherd Neame Limited (Registered in England number 138256) were approved by the Board of Directors on 14 September 2015 and were signed on its behalf by:

 

Miles Templeman

Jonathan Neame

Directors



Cash flow statement

52 weeks ended 27 June 2015

 




52 weeks ended


52 weeks ended




27 June 2015


28 June 2014



£'000

£'000

£'000

£'000

Net cash inflow from operating activities (see note a)


23,659


22,437

Returns on investment and servicing of finance





Interest paid

(4,391)


(3,584)


Interest received

13


25




(4,378)


(3,559)

Taxation paid


(2,297)


(1,458)

Capital expenditure and financial investment





Purchase of tangible fixed assets

(13,165)


(8,819)


Proceeds of sales of tangible fixed assets

3,155


2,217


Additional loans to customers

(52)


(210)


Customer loan redemptions

173


152




(9,889)


(6,660)

Equity dividends paid


(3,861)


(3,236)

Net cash inflow before financing


3,234


7,524

Financing





Purchase of own shares


(465)


(432)

Share option proceeds


43


-

Reclassification to reflect maturity



(1,987)

Repayment of long-term loan


(2,000)


-

Movement in cash during the period


812


5,105



Notes to the cash flow statement

52 weeks ended 27 June 2015

 

a  Reconciliation of operating profit to net cash inflow from operating activities

 


52 weeks ended 27 June 2015

52 weeks ended 28 June 2014


Before Exceptional items

Exceptional items

Total

Before Exceptional items

Exceptional items

Total


£'000

£'000

£'000

£'000

£'000

£'000

Operating profit

14,090

(375)

13,715

13,401

(1,279)

12,122








Depreciation and amortisation

6,731

-

6,731

6,708

-

6,708

Impairment provision

-

375

375

-

45

45

Charge for share-based payments credited to reserves

425

-

425

413

26

439

Increase in stocks

(584)

-

(584)

(627)

-

(627)

Decrease in debtors and prepayments

2,053

-

2,053

582

-

582

Increase/(decrease) in creditors and accruals

1,326

(597)

729

2,406

412

2,818

Free trade loan discounts

136

-

136

162

-

162

Loss on sale of assets (excluding property)

79

-

79

188

-

188


10,166

(222)

9,944

9,832

483

10,315

Net cash inflow from operating activities

24,256

(597)

23,659

23,233

(796)

22,437

 

b  Reconciliation of cash flows to movement in net debt





52 weeks ended 27 June 2015

52 weeks ended 28 June 2014





£'000

£'000

Opening cash and overdraft

3,994

(1,111)

Closing cash and overdraft

4,806

3,994

Increase in cash during the period

812

5,105

Reclassification to reflect maturity

-

1,987

Repayment of long-term loan

2,000

-

Amortisation of loan issue costs

(153)

(148)

Movement in net debt during the period

2,659

6,944

Net debt at beginning of the period

(71,469)

(78,413)

Net debt at end of the period

(68,810)

(71,469)

 

c  Analysis of changes in net debt




2014

Cash flow

Reclassification to reflect maturity

Repayment of long-term loan

Amortisation of issue costs

2015




£'000

£'000

£'000

£'000

£'000

£'000

Cash


5,981

812

-

-

-

6,793

Debt due within one year


(1,987)

-

(1,987)

2,000

(13)

(1,987)



3,994

812

(1,987)

2,000

(13)

4,806

Debt due after more than one year


(75,463)

-

1,987

-

(140)

(73,616)

Total


(71,469)

812

-

2,000

(153)

(68,810)

 

 

 

 

Notes to the accounts

27 June 2015

 

1  Turnover          

Turnover comprises sales net of discounts, rents receivable and services rendered from continuing trading activities, excluding value added tax. The Directors consider that the business carried on by the Company is that of a fully integrated regional brewer operating in the UK and that this constitutes one class of business. The export sales during the year were £3,271,000 (2014: £3,485,000).

 

 

2  Taxation

a  Tax on profit on ordinary activities


52 weeks ended

27 June 2015

52 weeks ended

28 June 2014


£'000

£'000

Current tax:



UK Corporation tax at 20.75% (2014: 22.50%)

2,270

2,196

Prior year over provision

(19)

(50)

Total current tax

2,251

2,146

Deferred tax:



Origination and reversal of timing differences

(70)

(65)

Effect of reduction in the rate of corporation tax

-

(535)

Prior year over provision

(10)

-

Total deferred tax

(80)

(600)

Total tax charge

2,171

1,546

 

 

b   Factors affecting the current tax charge

The tax assessed on the profit on ordinary activities before taxation for the year is higher than the standard average statutory rate of corporation tax in the UK of 20.75% (2014: 22.50%). The differences are reconciled below.

 


52 weeks ended

27 June 2015

52 weeks ended

28 June 2014


£'000

£'000

Profit on ordinary activities before tax

9,428

7,724




UK Corporation tax at average statutory rate 20.75% (2014: 22.50%)

1,956

1,738

Expenses not deductible for tax purposes and non-taxable income

284

416

Capital allowances less than depreciation

124

81

Short-term timing differences

(33)

49

Utilisation of tax losses

(19)

(65)

Profit on sale of property less chargeable gains

-

(23)

Rolled over gains on asset disposals

(42)

-

Prior year over provision

(19)

(50)

Total current tax

2,251

2,146

The exceptional profit on the disposal of properties of £201,000 (2014: £224,000) gives rise to a tax charge of £nil (2014: £28,000) after the effect of rollover relief. The exceptional operating charge of £375,000 (2014: £1,279,000) gives rise to a tax credit of £nil (2014: £104,000). This gives a net tax credit on exceptional items of £nil (2014: £76,000).

 

 

c   Factors that may affect future tax charges

No provision is made for the taxation liability which would arise on the disposal of properties at their revalued amounts or on gains rolled over into replacement assets. Such tax would become payable only if the property were sold without it being possible to claim rollover relief. The total amount unprovided is estimated at £3.6m (2014: £3.6m), based on a corporation tax rate of 20% (2014: 20%). At present it is not envisaged that any such tax will become payable in the foreseeable future.

 



3  Dividends


52 weeks ended

27 June 2015

52 weeks ended

28 June 2014


£'000

£'000

Declared and paid during the year



50p ordinary shares:



Final dividend for 2014: 20.75p

3,074

-

Interim dividend for 2015: 5.30p

787

-


3,861

-

Declared and paid during the year



£1 'A' shares:



Final dividend for 2013: 20.15p

-

2,302

Interim dividend for 2014: 5.15p

-

590


-

2,892

2p 'B' shares:



Final dividend for 2013: 0.403p

-

274

Interim dividend for 2014: 0.103p

-

70


-

344

Dividends paid

3,861

3,236




Proposed for approval at the 2015 AGM:                                                                                                                                                                                                                                 

Final dividend for 2015 on 50p ordinary shares: 21.40p (2014: 20.75p)

3,172

3,074

Shares held by the Company (and not allocated to employees under the Share Incentive Plan) are treated as cancelled when calculating dividends and earnings per share.

 

 

4  Earnings per share








52 weeks ended

28 June 2014

52 weeks ended

28 June 2014


£'000

£'000

Profit attributable to equity shareholders

7,257

6,178




Weighted average number of shares in issue

14,770

14,746

Dilutive outstanding options

113

121

Adjusted weighted average share capital

14,883

14,867

Basic

49.1p

41.9p

Basic before exceptional items

50.3p

48.5p

Diluted

                48.8p

                41.6p

The earnings per share before exceptional items are calculated on profit after tax and before exceptional items of £7,431,000 (2014: £7,157,000).

 

 

5  Accounts

The financial information set out above does not constitute the Company's statutory accounts for the 52 weeks ended 27 June 2015 or 52 weeks ended 28 June 2014 but is derived from those accounts. Statutory accounts for 2014 have been delivered to the Registrar of Companies and those for 2015 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) of the Companies Act 2006.

 

The preliminary announcement is prepared on the same basis as set out in the previous year's annual accounts.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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