UK's Shepherd Neame FY revenue slips, partly on fall in beer volumes

Overview

• UK brewer and pub operator's yearly revenue fell 1.1% amid challenging sector conditions

• Underlying profit before tax rose 1.8%, driven by strong pub performance and higher tenanted income

• Company proposes 3% higher full-year dividend and confirms board leadership changes after 2026 AGM

Outlook

• Company says demand in its pubs remains strong, with good momentum continuing into new financial year

• Shepherd Neame is reviewing its Brewing and Brands strategy due to ongoing volume and cost pressures

• Company remains cautious about inflation, interest rates and potential impact of a Tourism Tax

Result Drivers

• PUB SALES GROWTH - Strong like-for-like sales in London retail pubs and tenanted estate drove underlying profit increases

• BREWING AND BRANDS PRESSURE - Declining beer volumes and rising logistics costs in Brewing and Brands segment weighed on revenue and profit

• INVESTMENT RETURNS - Recent investments in pub sites, especially in London and coastal inns and hotels, delivered strong performance

Company press release:

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "strong buy"

• The average consensus recommendation for the restaurants & bars peer group is "buy."

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 13 three months ago

Reuters Recommended Reads

• Sept 29 - Irn-Bru maker AG Barr sees stronger second half as supply woes ease

• Sept 29 - UK's A G Barr interim revenue rises 8.5% on core brands and acquisitions

• Sept 28 - UK shop price inflation slows despite costs pressures, BRC says

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)