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Shepherd Neame profits hit by high costs

Published:  24 March, 2009

Kent-based brewer and pub operator Shepherd Neame has reported a 7.2% rise in turnover for the six months ending December last year.

But rising costs have resulted in a dip in profits when compared with the same period in 2007.
Shepherd Neame's operating profit before tax fell to £3.6 million when compared to the half year in 2007 when a profit of £6.6 million was reported.

The company also reported a rise in beer sales with total beer volume up by 6.7%.

Jonathan Neame, Chief Executive of Shepherd Neame, said that the company had performed well despite the economic downturn and revealed that profits had been dented by a 27% rise in raw material costs when compared with the previous year.

"Despite a difficult economic background, we have delivered a strong sales performance," Neame said.

"Our retail business has been resilient, with like for like sales down 0.2% for the six months to December 27 but up 1.8% in the thirteen weeks ended 28 February 2009. Our London pubs increased like for like sales by 2.9% during the six months to 27 December. Tenanted contribution was down 4.1% on a like for like basis.

"Beer sales have been strong, with total volumes up 6.7%. Our margins have been impacted by higher raw material costs, which were 27% up on the same period last year.

"We anticipate the second half performance will follow the pattern of the first half. We will continue to experience high costs for the rest of the year but expect them to start to reduce as we enter our next financial year."