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Coronavirus Kent: Faversham brewer Shepherd Neame fears impact of virus despite strong recent performance

10:50, 12 March 2020

updated: 10:55, 12 March 2020

Shepherd Neame chiefs say they are expecting "an inevitable bearing on our business and supply chain" as a result of tighter restrictions to prevent the spread of coronavirus.

The Faversham-based brewery is likely to be hit if people start avoiding its pubs and restaurants over the coming weeks in order to prevent the spread of the illness.

Jonathan Neame says the company is monitoring carefully the impact of coronavirus on its business
Jonathan Neame says the company is monitoring carefully the impact of coronavirus on its business

It comes after it announced a positive set of financial results for the last six months, with turnover and profit on the up.

Turnover for the 26 weeks ending on December 28, 2019, increased by 3.3% to £79million (up from £76.5m in 2018), while underlying profit before tax was up 4.8% to £6.2m.

Chief executive Jonathan Neame said: "Shepherd Neame continues to benefit from a well-balanced business. These results demonstrate the strength of our tenanted pubs in a period where managed margin was held back by the challenging cost environment.

"We are pleased to see that own brand beer and cider volume is outperforming the market. As a result of this strategy we again have delivered a solid performance in the first half.

"For the rest of the year, we remain concerned about the potential impact of the Covid-19 virus. We have seen no discernible change in customer behaviour to date.

Shepherd Neame says its supply chain could be hit
Shepherd Neame says its supply chain could be hit

"Looking forward, it is impossible at this stage to gauge the likely impact, but should there be significant restrictions on travel and the movement of people in the coming months, that would have an inevitable bearing on our business and our supply chain.

"Over the longer term, the quality and profile of the company’s brands and pubs will stand us in good stead and form an excellent platform from which to grow. We are confident we are building an even stronger business for the future.”

The brewers have 239 tenanted pubs and 69 managed pubs in its portfolio and both delivered solid performances. Managed pub saw sales grow by 4.3% to £37m, up 0.9% year-on-year for like-for-like sales.

Tenanted pubs traded strongly despite few pubs, with average income growing by 5% - up 2.9% on like-for-like income the year before.

Meanwhile, its own brand beer and cider volume grewby 3.3% - ahead of market growth of 2.65%.

Sales of its own-brand beers and cider are on the rise
Sales of its own-brand beers and cider are on the rise

It added it had made a "promising start" to the new partnership for distributing Singha beer.

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