Shepherd Neame anticipates hit to margins amid soaring inflation as brewer returns to profit

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Shepherd Neame announced a 3.5 per cent increase in its full-year dividend, to 20.7p from 20p.
Shepherd Neame announced a 3.5 per cent increase in its full-year dividend, to 20.7p from 20p.

Brewer and pub operator Shepherd Neame has said it anticipates a hit to margins from inflationary pressures in the coming months.

“Our business is in good shape and has traded well following the lifting of all restrictions. However, the current economic uncertainties are putting inflationary pressure on the sector which will impact margins,” Jonathan Neame, CEO of Shepherd Neame, said.

Businesses are facing hiked energy bills and labour costs as well as seeing ingredient costs soar. 

Nevertheless, the Kent-based operator reported a strong pandemic rebound with revenue hitting pre-pandemic half-year levels. 

Sales hit £78.7m of sales, an increase of more than half versus the year prior, while underlying EBITDA stood at £11.3m.

The brewer said most of its central London pubs are nearing normal sales after Covid measures were eased.

The increase of back to work footfall in particular has aided a booming recovery for the capital’s venues.

In results on Wednesday, the operator said like-for-like sales were 110 per cent for the 13 weeks to 26 March 2022, compared to an equivalent period in 2021.