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Shepherd Neame Ltd (SHEP)

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Wednesday 26 September, 2012

Shepherd Neame Ltd

Final Results

RNS Number : 1365N
Shepherd Neame Limited
26 September 2012



26 September 2012



Shepherd Neame, the Kent-based brewer and pub operator, today announces results for the 53 weeks ended 30 June 2012.


Financial performance:


§ Turnover up 9.6% to £133.0m (2011: £121.3m)

§ Operating profit before exceptionals up 3.7% to £12.7m (2011: £12.3m)

§ Profit before tax up 39.7% to £9.1m (2011: £6.5m)

§ Basic earnings per £1 share up 58.7% to 54.6p (2011: 34.4p)

§ Basic earnings per £1 share before exceptionals up 7.8% to 49.8p (2011: 46.2p)

§ Final dividend per £1 share of 19.6p (2011: 19.0p). Total dividend per £1 share of 24.5p (2011: 23.8p)


Operational highlights:


§ Record turnover, record beer sales and record EBITDA

-     Total beer volume up 5.6% against UK market decline of 1.2%

-     Own beer volume up 5.2%

-     Excellent performances from Spitfire and Asahi Super Dry


§ Strong performance across pub and hotel estate

-     Like-for-like managed sales on a 52 week basis up 7.6%, with liquor up 6.2%, food up 10.9% and accommodation up 7.0%

-     Tenanted estate returned to growth, with same outlet like-for-like EBITDAR on a 52 week basis up 0.3% and average EBITDAR per pub up 2.7%


§ Acquisition of seven individually selected high quality pubs and hotels. Since the year end we have completed the acquisition of the Royal Wells Hotel, Tunbridge Wells, which adds a further 23 letting rooms to the estate and brings the total number to 499


§ Promising start to the new financial year. In the 12 weeks to 22 September like-for-like managed house sales are up by 5.1%, beer volume is level with the prior year and for the nine weeks to 1 September tenanted same outlet like-for-like EBITDAR grew by 2.5%


Jonathan Neame, Chief Executive, commented:


"This has been another successful year for the company. Our beer, food and accommodation sales have all enjoyed strong growth for the second year in a row and the tenanted estate performance has been encouraging.


Our strategy to invest in our pubs and brands during the economic downturn has strengthened the company, improved its competitive position and enhanced our reputation with consumers. Recent pub acquisitions have been successful and this has enabled us to take another step forward this year with some further excellent purchases, which provides a good platform for the future."




For further information, please contact:


Jonathan Neame, Chief Executive

Shepherd Neame Limited

Tel:  01795 532206

Deborah Walter / Clotilde Gros

Kreab Gavin Anderson

Tel:  020 7074 1820

Regional and Trade Media Contact:

Pip Clarkson

Tel:  01622 604600

Edwards Harvey Associates


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





Shepherd Neame is a regional brewer and pub owner based in Faversham, Kent.  Established in 1698, it is Britain's oldest brewer and employs over 1,000 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 fastest growing premium bottled ales in the UK with national distribution on draught (4.2% abv) and in bottle (4.5% abv) - supported by a multi award-winning 'Bottle of Britain' advertising campaign.


§ Bishops Finger - Connoisseur premium ale (5.4% abv), nationally distributed in all major supermarkets - one of the country's leading bottled ales.  


§ Master Brew - Widely distributed draught ale (3.7% abv) - a 'local hero' brand mainly sold in Kent.   


§ Hürlimann - Swiss lager (4.8% abv), UK trademark owned by Shepherd Neame.


§ Whitstable Bay - modern, light organic bottled ale accredited by the Soil Association (4.5% abv) with national distribution.


§ Canterbury Jack - Light, crisp, refreshing, cask ale (3.5% abv) launched in 2008 on draught, available across the South East.


The company also brews lagers under licence or contract:


§ Asahi Super Dry - Japan's leading beer (5% abv), which is produced under an exclusive licence for brewing, sales and marketing.


§ Kingfisher - The leading Indian lager brand produced under licence from United Breweries of India (4.8% abv) and distributed in the majority of UK Indian restaurants.


§ Sun Lik - Draught Chinese lager in the UK (5% abv) and brewed under licence from the Hong Kong Brewery Ltd, part of the San Miguel brewing company.


§ Oranjeboom Pilsener - Lager brewed under licence from United Dutch Breweries (3.9% abv), with wide distribution in the South East.


§ Samuel Adams - A full-flavoured and balanced US craft lager (4.8% abv) brewed under licence from the Boston Beer Company since April 2012.



Shepherd Neame sold 292,000 brewers' barrels of beer (84.1 million pints) including 252,000 brewers' barrels of own brewed and packaged beer (72.6 million pints) in the last year.  The majority of these sales were made in the UK although the Company also exports to more than 20 countries including Sweden, Italy and Ireland.


At the year end the Company operated 354 pubs in the South East, of which 310 were tenanted or leased and 44 managed.  The pub estate ranges from food-focused destination houses and hotels to historic coaching inns and traditional community 'locals'. 


Shepherd Neame's shares are traded on PLUS Market.  See for further information and the current share price.  For further information on the Company, see







I am pleased to report another successful year for the company and strong trading performance for the 53 weeks to 30 June 2012.


Of particular note this year is the strength of the beer business with growing distribution of key brands, a robust performance from our tenanted pubs and an outstanding year in the retail estate. We have enhanced the pub and hotel estate with seven individually selected high quality acquisitions.


Turnover for the year ended 30 June 2012 increased by 9.6% to £133.0m (2011: £121.3m). Operating profit before exceptionals is up 3.7% to £12.7m (2011: £12.3m) and profit before tax is up 39.7% to £9.1m (2011: £6.5m).


Basic earnings per £1 share are up 58.7% to 54.6p (2011: 34.4p) and basic earnings per £1 share before exceptional items are up 7.8% to 49.8p (2011: 46.2p).


During the year we have generated £19.8m (2011: £18.9m) of earnings before exceptional items, interest, tax, depreciation, amortisation, loss on sale of fixed assets (excluding property) and free trade loan discounts (EBITDA).


Acquisitions and disposals


On the back of this strong cash generation we have acquired two hotels for our Managed House division and five pubs to be operated under tenancy or lease. Our total cash investment in capital expenditure during the year was £23.3m (2011: £9.8m) of which our base business capital expenditure was £7.7m (2011: £6.3m) and investment in new outlets £15.6m (2011: £3.5m). We have realised proceeds of £3.5m (2011: £2.5m) from the sale of 12 small pubs (2011: eight) and two parcels of land.




As a result of this level of investment we have had a net cash outflow before financing of £10.7m for the year. We have therefore taken the opportunity to refinance our medium term loan facilities to provide a robust financing platform for the Company's growth plans. Our medium term loan facility has increased from £10m to £20m and will now expire with the Company's £10m revolving credit facility in May 2017. The existing £60m term loan remains unchanged and matures in 2026. Excluding the overdraft facility, this brings Shepherd Neame's total long and medium term committed credit facilities to £90m.




A final dividend of 19.60p (2011: 19.00p) per £1 'A' Ordinary Share and 0.392p (2011: 0.380p) per 2p 'B' Ordinary Share has been proposed by the Board, giving total dividends for the year of 24.50p (2011: 23.80p) per £1 'A' Ordinary Share and 0.490p (2011: 0.476p) per 2p 'B' Ordinary Share. This gives a total increase in dividend per share for the year of 2.9%.


The final dividend will be paid on 19 October 2012 to shareholders on the register at the close of business on 12 October 2012.


PLUS Markets


During the year, PLUS Markets, the exchange on which our £1 'A' shares are traded, announced its intention to sell the business and subsequently close the exchange. We were pleased to note, however, that in the event the exchange was acquired by ICAP, the world's largest interdealer broker. We believe that PLUS offers a cost-effective and transparent trading platform for our shares but we will continue to monitor developments with the market.


Board of Directors


This time last year we announced that we were in the process of recruiting a successor to Ken Littlefair as Finance and IT Director. I am delighted that we have been able to recruit Mark Rider who joined the Company in January 2012 and replaced Ken on the Board at his retirement in February. Mark joined J Sainsbury plc in 2001 and held a number of senior finance roles and had been Head of Finance, Food since 2008. Mark's experience is already proving to be of significant benefit to the Company. I would like to thank Ken again for his outstanding contribution in the last 12 years.


Industry Overview


The industry continues to be beset by excessive taxation and regulation. The excise duty and VAT burden is unfair and unsustainable. The Government continues to maintain its policy that alcohol taxes should increase by 2% above inflation - the so-called 'alcohol duty escalator' - even though the increases on beer raise very little additional revenue for the Exchequer even after a 42% increase in rate since 2008. This level of taxation impacts margins and so reduces the industry's capacity to invest and create jobs.


The disparity in excise duty level between the UK and neighbouring EU countries creates the perfect environment for fraud and criminal activity. However, rather than addressing the root cause, the Government is considering introducing fiscal marks, or 'tax stamps', as exists with spirits, to demonstrate that the product was produced in the UK. The industry believes this is misguided and disproportionate and may cost the sector £100m. The company is playing an active role in lobbying on these two issues.


During the year the Department for Business, Innovation and Skills (BIS) published its response to the Select Committee Report on Pub Companies. This has resulted in a strengthened and legally binding Industry Framework Code of Practice for the letting of pubs. The reforms provide increased transparency, improved dispute resolution and legal certainty for licensees. We welcome the Government's endorsement of the self-regulatory approach and also their recognition of the importance of traditional brewery tenancies.


Outlook and Summary


Against long term trends of declining beer sales, closing pubs, and economic uncertainty, Shepherd Neame continues to strengthen its business in all areas. Recent years have seen significant progress in modernising the brewery and investing in our pubs. In addition to our capital investments, we have built our skill base in sales, marketing, food and accommodation. We have reduced our exposure to declining or weak parts of the market and invested where there is growth and future potential. We have strengthened our position within our local geography but also have developed a growing presence in national consumer markets. We have built an excellent platform for sustainable growth.


We feel our business model is strong, our cashflow, balance sheet and financing are robust and we are well positioned to take advantage of growth opportunities as they arise.


M H Templeman






This has been a successful and positive year for the company. We have enjoyed revenue and contribution growth in all areas of the business. We have achieved record turnover, record beer sales and record EBITDA. We have increased investment in our brands and pubs and maintained excellent standards of product quality and customer service.


During the last year the economy has returned to recession and there have been periods of great economic uncertainty which have impacted consumer spending. However, the year of 2012 held out the prospect of three major events to boost sales: the Diamond Jubilee and Euro 2012 in June and the Olympics in August. Whilst we did experience a boost in sales in June for the Jubilee weekend, the impact of the major sporting events has only been felt in individual outlets rather than across our business. In general terms, though, the weather has a greater impact on our sales than the economy or one-off events and this was a wet and dull early summer.


In this context our sales growth has been particularly encouraging. Total revenues grew by 9.6%. The major drivers for this were:

•  strong retail sales enhanced by the impact of new acquisitions;

•  strong beer volumes driven by new distribution of our core brands and marketing activity;

•  53 week financial year versus 52 weeks in 2011; and

•  excise duty increases.


Even allowing for these factors, the underlying sales performance in all areas of the business has been very encouraging and highlights the strength and resilience of the business in a challenging market.

This turnover growth has driven our increase in operating profit, although our margins have been under some pressure and our product mix continues to evolve. Last year we highlighted the increases we faced in cereal and glass prices. We also experienced a significant uplift in utility costs.


Overall product cost inflation was impacted further by a 5.1% increase in excise duty in the Budget 2012. In the year, Shepherd Neame paid £32.1m in excise duty on own brewed beers compared to £19.5m in 2007. This is a misguided tax policy that impacts brewing and retailing margins and so reduces the capacity of the industry to invest and create jobs.


Brewing and brands


The total UK market for beer declined by 1.2% (2011: -6.7%) for the year to June 2012, with the UK On Trade down 3.4% (2011: -5.4%) and Off Trade up 1.2% (2011: -8.1%).


For the fifth year in a row our beer volume grew ahead of the market. Total beer volume for the 53 weeks grew by 5.6% (2011: +4.0%) and own beer volume by 5.2% (2011: +2.6%) to 252,000 Brewer's Barrels (BBs) (2011: 239,000 BBs).


The key driver of this growth has been bottled beer which was up 11.2% against strong growth in the previous year (2011: +13.9%). Keg volume performed well with modest growth but cask ale volume was down for the second year in a row.


Our core brands accounted for the majority of the uplift but it was also pleasing to note how well some of our smaller brands such as Whitstable Bay, Late Red and 1698 Bottled Conditioned Ale have performed.


Spitfire is our largest brand and volume grew by 5.7% (2011: +2.3%). In recent years we have focussed on driving distribution of the brand in the grocers. This has been backed by successful promotional activity to support the major events of this year, under the banner 'Glorious 2012', which has captured both customer and consumer imagination. These activities have enabled us to achieve excellent growth in rate of sale, both on and off promotion. We have been less successful in driving distribution in the on trade, as the customer increasingly buys local micro brewed beers. We have recruited more national on trade account managers to support this area of the business.


Bishops Finger performed less well with volume down 9.1% (2011: +3.9%). A proportion of this brand decline related to performance in Sweden, a key export market. We have subsequently engaged with a new distributor who will commence supply in January 2013.


Asahi Super Dry has had another exceptional year and was up 20.4% (2011: +16.8%). We have continued to focus our activities on achieving distribution in premium and high-profile outlets in key metropolitan areas in the UK. We now have sizeable brand presence in London. Our distribution is supported by well-targeted sponsorships and brand partnerships. Building on the success of the Royal Albert Hall we have established a new brand partnership with the Photographers' Gallery in London and have become the title sponsors of the Asahi Beach Polo Championships. We are also official beer partner for Lusty Glaze, a private beach venue in Cornwall for their sporting and music events. The focus of our marketing activity is around arts, music, entertainment and prestige sporting events, and, gives the brand excellent profile for our target market.


Our strategy is to build a portfolio of premium ales and licensed lagers that have a strong local and national consumer franchise. We have been very successful in this area in recent years and have established excellent partnerships with international brand owners, such as Asahi, who are willing to share their knowledge and expertise with us to develop the brand for mutual benefit. To that end, we are pleased to have concluded a new licence to brew, sell and market Samuel Adams from Boston Beer Company to address the growing interest in US Craft Beers in the UK. Initial reaction to this new addition to our portfolio has been very encouraging. Our contract with United Breweries of India for the Kingfisher lager brand is due for renewal in the near future. We are currently in discussions about extending this important relationship and expect this to be concluded in the next year. During the year we ceased production of Holsten Export, as it no longer fitted our portfolio.


To support our sales and distribution plans we have been building our marketing capability and have now established a strong and effective team. To reflect consumer shifts to digital marketing, we have made further enhancements to our website to improve usage via mobile handheld devices. We have grown the site and increased the number of features and functionality, including greater personalisation for users.


The success of our sales team in growing beer volume can only be achieved by an efficient, flexible and cost-effective production and distribution service.


Product quality throughout the year was consistently of a very high standard. We regularly win awards and accolades from consumers. In the 2012 International Beer Challenge we won no less than seven awards, including a Gold Medal for Late Red, and a further four awards, including a Gold Medal for 1698 Bottled Conditioned Ale, from the British Bottlers Institute (BBI).


Our brewing team was enhanced during the year by the appointment of Richard Frost as Head Brewer. Richard brings with him a wealth of experience gained during his time at the Wolverhampton Brewery.

Our emphasis on product quality at the brewery is supported by our Technical Services Team. They make cost-efficient installations for beer dispense and provide support, service and education for our customers. They are an excellent and valued resource that do much to ensure top product quality in glass.


The brewing team have delivered volume growth and introduced more SKUs to meet the demand of our customers without an increase in capacity. The company continues to meet its obligations to reduce its impact on the environment and in the coming year will deliver two substantial projects on the site: a new refrigeration plant to meet changes in legislation and a water recovery plant to minimise the consumption of extract well water and to reduce waste into the water system. This latter investment is required now as we reach the end of a long-term contract with our local water company. During the period of transition, over the coming year, we anticipate higher than usual, but non recurring, costs. The cash investment in capital expenditure in these two projects in 2012/13 is estimated at £2.7m but will mitigate future cost inflation in these areas.


We have developed our supply chain management skills very significantly in recent years to adapt to the growth and changing demands of our customer base. The Shepherd Neame distribution centre has enjoyed an outstanding year with excellent cost control and the highest ever levels of service. I am particularly pleased that we won the Team of the Year in the European Supply Chain Excellence Awards 2011, a worthy tribute to their outstanding efforts.


Finally our Visitor Centre has continued to develop and grow in popularity. The team do a first class job in attracting visitors to the brewery to learn about its history and our beers. Following the success in winning a number of prestigious awards this year, it was very pleasing to note that visitor footfall was up 30% against a local tourism market decline.


Pub operations




At the year end we operated 354 (2011: 359) pubs and hotels of which 311 (2011: 316) are freehold. Of these 44 (2011: 44) are managed and 310 (2011: 315) are tenanted or leased.


Since July 2007, the on trade has undergone major changes as a consequence of the cumulative impact of the smoking ban, the alcohol duty escalator and the economic downturn. This process of change has presented some excellent opportunities to grow our food and accommodation business but has also put considerable pressure on small community wet led pubs.


The profile of our estate has changed accordingly during this five year period, as we have acquired 29 outstanding pubs and hotels and sold 52 predominantly small community tenanted pubs. Since 2007 we have invested £40.8m in new sites and realised combined proceeds of £21.3m. Many of these new outlets are amongst our best performing businesses. This not only reflects the unusual opportunities to make selective acquisitions during this time but also a clear strategy to target outlets with a broad range of facilities, individual character and high profile locations.


The year has seen further success in pursuing this investment strategy with the acquisition of two prestigious hotels, The Bell Hotel, Sandwich and The Fayreness, Kingsgate and five pubs from Enterprise Inns all within our trading heartland: The Camden Arms, Pembury; The Kings Head, Deal; The Old City Bar, Canterbury; The Old Neptune, Whitstable; and The Zetland Arms, Kingsdown. The two hotels are operated under management. The pubs will continue to operate under current lease arrangements. Of these seven outlets, all are well-known destinations and five enjoy exceptional coastal situations.


Our total investment in acquiring these outlets during this financial year was £15.6m. Four of the new pubs were acquired on the last day of the financial year and made no contribution to our financial results. The others performed in line with expectation. We have disposed of 12 (2011: eight) small pubs and two parcels of land for £3.5m (2011: £2.5m). We anticipate a similar number of disposals during the current year.


This investment strategy further strengthens our aspiration to own the best pubs within our trading heartland. It also provides a more sustainable platform from which to drive further investment to improve the overall offer to our customers.


Managed pubs and hotels


Our retail performance has been a major driver of turnover and profit growth for the company this year. Total revenues have grown by 14.5% (2011: +2.9%) and profit contribution by 25.2% (2011: +3.9%).

Same outlet like-for-like sales on a 52 week basis were up 7.6% (2011: +7.4%), with liquor +6.2% (2011: +5.6%), food +10.9% (2011: +11.1%) and accommodation +7.0% (2011: +9.7%). This represents a strong performance over a two year period.


We have seen excellent individual performances in particular at the Crown Hotel, Blackheath following the refurbishment in 2011; the Spanish Galleon in Greenwich, following the re-opening of the Cutty Sark and development of an innovative fish bar within the pub; and the Jamaica Wine House, after the redevelopment of the basement into a wine bar. The Millers Arms, Canterbury; The Crown Inn, Chislehurst; and Mabel's Tavern, London have also enjoyed notable increases in trade.


We continue to drive quality, value for money, presentation and choice of menu within our Managed Houses, something our customers recognised, with average food spend per visit moving to £11.23 (2011: £9.12). I am particularly pleased that after several years of development we won The Best Food Offer at the Publican Awards 2012.


The two new hotels have added 66 letting rooms and The Camden Arms and Kings Head a further 22 to our business. This brings the total number of letting rooms in the overall pub estate to 476 at the year end. We operate 246 accommodation rooms in our managed estate (2011: 180) and a further 230 in our tenanted estate (2011: 204). This reflects a positive step forward in our strategy to develop an enviable collection of 3-star hotels and 4-star inns that provide high quality rooms with individual character.


The performance in our Managed Houses shows the impact of this strategy with revenue per available room (RevPAR) increasing by 13.2% to £43 (2011: £38). In the last year we have carried out an upgrade at the Dog and Bear, Lenham and commenced phase 1 of a major re-development of the Marine Hotel, Tankerton with 15 rooms upgraded. In the coming year, we will complete the remainder of this project at an estimated total cost over two years of £1.6m.


Tenanted and leased pubs


I am pleased that tenanted trade revenue grew by 2.2% (2011: -1.5%) and profit contribution by 1.2% (2011: -3.1%) even though we operated fewer outlets during the year.


We have continued our strategy of replacing smaller pubs with higher turnover, higher quality outlets combined with increased investment in existing core outlets. Accordingly average EBITDAR per pub grew by 2.7% (2011: +0.8%) and same outlet like-for-like EBITDAR on a 52 week basis grew by an encouraging 0.3% (2011: -3.0%).


During the year we made 26 successful refurbishments in the tenanted business. In all cases we have provided a turnkey interior design and supported the re-opening with enhanced training and marketing support. The results to date have been very positive and give us the confidence to invest more in the coming year to enhance the offer through our tenanted businesses.


Of particular note this year have been the developments at the Imperial, Southborough; The Bear Inn, Faversham and the Royal at Tankerton where the average investment has been £94,000. Many other small projects have also resulted in a strong uplift in trade.


We are focussed on improving the level of service and support to our tenanted licensees and, aside from the increased development spend, have also introduced enhanced purchasing deals on food and other items and a new incentive scheme. In the Head Office team our Business Development Managers have received training for the new BII Professional Certificate. We have recruited two surveyors to strengthen the team and, since the year end, a Development Chef exclusively to support our tenanted operation.

The results in the tenanted business show that our strategy of increasing our investment to drive the offer is delivering better results and a robust platform to build on. We have enjoyed increased revenue and profitability, higher income per pub, lower licensee turnover and an improving recruitment trend.


Current trading


We have made a promising start to the new financial year. In the 12 weeks to 22 September like-for-like managed house sales are up by 5.1%, beer volume is level with the prior year and for the nine weeks to 1 September tenanted same outlet like-for-like EBITDAR grew by 2.5%.


This has been a satisfactory performance considering that the much anticipated boost to tourism from the London 2012 Olympics did not materialise - indeed, except for a handful of individual pubs situated near event locations, trade in London was generally down on the same period last year - and the wet and dull weather that we experienced in the early part of the summer continued into July.




This has been another productive and successful year for the company. Our beer, food and accommodation sales have all enjoyed strong growth for the second year in a row and the tenanted estate performance has been encouraging.


Our cash flow has been good, in spite of the inflationary pressures on the business and the weakness of consumer spending. The balance sheet remains strong and our financing is secured for the medium term.


Our strategy to invest in our pubs and brands, people and processes, during the economic downturn, has strengthened the company, improved its competitive position and enhanced the reputation of our brands and pubs with consumers. Pub acquisitions of recent years have been successful and this has enabled us to take another step forward this year with some further excellent purchases.


We have continued to invest in our people and have made some good new appointments to the team who will help us to deliver our strategy. We are as committed as ever to driving down costs, optimising efficiency and maximising our returns.


This is a good platform for the future. We aim to deliver long term growth in net asset value per share and cash backed dividend growth. The short term will always present economic uncertainties that are beyond our control and in the coming year we remain concerned about increased cost inflation that may present itself. Against this backdrop we are building a stronger beer and pub business to prosper over the long term. This has been a year of further good progress in that direction.


J B Neame

Chief Executive



Consolidated profit and loss account

53 weeks ended 30 June 2012


                                                                                                           53 weeks to 30 June 2012                                      52 weeks to 25 June 2011             

                                                                                                 Before                                                                  Before
                                                                                  exceptional items Exceptional items              Total exceptional items Exceptional items                  Total
                                                                            note                 £'000                  £'000                  £'000                  £'000                  £'000                  £'000

Turnover                                                               1            133,025                       -            133,025            121,346                       -            121,346

Operating charges                                                             (120,321)                       -          (120,321)         (109,094)              (1,915)         (111,009)

Operating Profit                                                                   12,704                       -              12,704              12,252              (1,915)              10,337

Profit on sale of property                                                                 -                   649                   649                       -                   419                   419

Profit on ordinary activities before interest                  12,704                   649              13,353              12,252              (1,496)              10,756

Interest receivable and similar income                                           81                       -                     81                     32                       -                     32

Interest payable and similar charges                                     (4,373)                       -              (4,373)             (4,303)                       -             (4,303)

Profit on ordinary activities before taxation                    8,412                   649                9,061                7,981              (1,496)                6,485

Taxation                                                                  2             (2,068)                   (44)              (2,112)             (2,090)                       -             (2,090)

Profit after taxation                                                               6,344                   605                6,949                5,891              (1,496)                4,395

Earnings per £1 nominal share value                                                                 

Basic                                                                       4                                                                  54.6p                                                                  34.4p

Basic before exceptional items                               4                                                                  49.8p                                                                  46.2p

Diluted                                                                     4                                                                  54.3p                                                                  34.2p




Consolidated 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 £6,949,000 for the 53 weeks ended 30 June 2012 (52 weeks ended 25 June 2011: £4,395,000).



Note of consolidated historical cost profits and losses

                                                                                                                                                                                        53 weeks ended   52 weeks ended
                                                                                                                                                                                             30 June 2012      25 June 2011
                                                                                                                                                                                                        £'000                  £'000

Profit on ordinary activities before taxation                                                                                                                                   9,061                6,485

Realisation of property revaluation                                                                                                                                                   895                   444

Difference between an historic cost depreciation charge and the actual depreciation charge for the year                                    30                     31

Historical cost profit on ordinary activities before taxation                                                                                                           9,986                6,960

Historical cost profit for the year retained after taxation                                                                                                               7,874                4,870


Consolidated and parent company balance sheets

As at 30 June 2012



                                                                                                                                                    Group                 Group           Company           Company
                                                                                                                                          30 June 2012      25 June 2011      30 June 2012      25 June 2011
                                                                                                                                                      £'000                  £'000                  £'000                  £'000

Fixed assets                                                                                                            

Intangible fixed assets                                                                                                                       -                     18                       -                     18

Tangible fixed assets                                                                                                              197,267            184,093            197,267            184,093

Investments and loans                                                                                                                1,343                1,541                3,071                1,642

                                                                                                                                                 198,610            185,652            200,338            185,753

Current assets                                                                                                                                                                                                            

Stock                                                                                                                                           5,671                4,843                5,671                4,843

Debtors                                                                                                                                      17,935              18,343              17,935              18,343

Cash                                                                                                                                               376                4,588                   376                4,588

                                                                                                                                                   23,982              27,774              23,982              27,774

Creditors: amounts falling due within one year                                                                                                                                                   

Creditors                                                                                                                                  (19,325)           (19,760)            (21,053)           (19,861)

                                                                                                                                                (19,325)           (19,760)            (21,053)           (19,861)

Net current assets                                                                                                                  4,657                8,014                2,929                7,913

Total assets less current liabilities                                                                                 203,267            193,666            203,267            193,666

Creditors: amounts falling due after more than one year                                                                                                                                 

Bank loans                                                                                                                               (76,158)           (69,506)            (76,158)           (69,506)

Provision for liabilities - deferred tax                                                                                        (3,939)             (4,616)              (3,939)             (4,616)

Net assets                                                                                                                             123,170            119,544            123,170            119,544


Capital and reserves                                                                                                                                                                                                  

Called up share capital                                                                                                              12,818              12,818              12,818              12,818

Share premium account                                                                                                              1,439                1,439                1,439                1,439

Revaluation reserve                                                                                                                  13,151              14,046              13,151              14,046

Reserve for own shares held                                                                                                      (885)                (855)                 (885)                (855)

Profit and loss account                                                                                                             96,647              92,096              96,647              92,096

Equity shareholders' funds                                                                                               123,170            119,544            123,170            119,544

These accounts were approved by the Board of Directors on 12 September 2012 and were signed on its behalf by:


M H Templeman

J B Neame


Consolidated cash flow statement

53 weeks ended 30 June 2012


                                                                                                                                                              53 weeks ended                            52 weeks ended
                                                                                                                                                                   30 June 2012                                25 June 2011
                                                                                                                                                      £'000                 £'000                  £'000                  £'000

Net cash inflow from operating activities (see note a)                                                                           19,902                                       18,470

Returns on investment and servicing of finance                                                                                                                                                 

Interest paid                                                                                                                              (5,124)                                       (4,246)                        

Interest received                                                                                                                              87                                             26                        

                                                                                                                                                                           (5,037)                                       (4,220)

Taxation paid                                                                                                                                                   (2,684)                                       (2,052)

Capital expenditure and financial investment                                                                                                                                                       

Purchase of tangible fixed assets                                                                                          (23,258)                                       (9,811)                        

Proceeds of sales of tangible fixed assets                                                                                 3,457                                         2,510                        

Additional loans to customers                                                                                                      (399)                                          (323)                        

Customer loan redemptions                                                                                                            375                                           191                        

                                                                                                                                                                         (19,825)                                       (7,433)

Equity dividends paid                                                                                                                                    (3,058)                                       (2,958)

Net cash (outflow)/inflow before financing                                                                                            (10,702)                                         1,807


Purchase of own shares                                                                                                                                      (510)                                                -

New long-term loans                                                                                                                                            7,000                                                -

Repayment of long-term loan                                                                                                                                       -                                       (5,000)

Movement in cash during the period                                                                                                        (4,212)                                       (3,193)

The consolidated and parent company cash flows are identical.

Notes to the consolidated cash flow statement

53 weeks ended 30 June 2012



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

                                                                                                                                                                                         53 weeks ended   52 weeks ended
                                                                                                                                                                                             30 June 2012      25 June 2011
                                                                                                                                                                                                        £'000                  £'000

Operating profit                                                                                                                                                                        12,704              10,337


Depreciation and amortisation                                                                                                                                                        6,450                6,209

Impairment provision                                                                                                                                                                             -                1,915

Charge for share-based payments credited to reserves                                                                                                                 245                   147

(Increase)/decrease in stocks                                                                                                                                                       (828)                       4

Decrease/(increase) in debtors and prepayments                                                                                                                           345             (1,272)

Increase in creditors and accruals                                                                                                                                                   296                   647

Free trade loan discounts                                                                                                                                                                 280                   284

Loss on sale of assets (excluding property)                                                                                                                                   410                   199

                                                                                                                                                                                                       7,198                8,133

Net cash inflow from operating activities                                                                                                                           19,902              18,470



b  Reconciliation of cash flows to movement in net debt

                                                                                                                                                                                        53 weeks ended   52 weeks ended
                                                                                                                                                                                             30 June 2012      25 June 2011
                                                                                                                                                                                                        £'000                  £'000

Opening cash and overdraft                                                                                                                                                          4,588                7,781

Closing cash and overdraft                                                                                                                                                              376                4,588

Decrease in cash during the period                                                                                                                                            (4,212)             (3,193)

New long-term loans                                                                                                                                                                   (7,000)                       -

Issue costs capitalised                                                                                                                                                                     475                       -

Repayment of long-term loan                                                                                                                                                                -                5,000

Amortisation of loan issue costs                                                                                                                                                    (127)                (175)

Movement in net debt during the period                                                                                                                                    (10,864)                1,632

Net debt at beginning of the period                                                                                                                                           (64,918)           (66,550)

Net debt at end of the period                                                                                                                                                     (75,782)           (64,918)



c  Analysis of changes in net debt

                                                                                                                                                                                           Amortisation of                        
                                                                                                                              2011           Cash flow           New loans         issue costs                  2012
                                                                                                                             £'000                  £'000                  £'000                  £'000                 £'000

Cash                                                                                                                   4,588              (4,212)                       -                       -                   376

                                                                                                                           4,588              (4,212)                       -                       -                   376

Debt due after more than one year                                                               (69,506)                       -             (6,525)                 (127)           (76,158)

Total                                                                                                              (64,918)              (4,212)             (6,525)                 (127)           (75,782)


Notes to the accounts

30 June 2012


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 Group 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 £1,874,000 (2011: £1,836,000).


2  Taxation

a  Tax on profit on ordinary activities

                                                                                                                                                                                         53 weeks ended   52 weeks ended
                                                                                                                                                                                             30 June 2012      25 June 2011
                                                                                                                                                                                                        £'000                  £'000

Current tax:

UK Corporation tax at 25.5% (2011: 27.5%)                                                                                                                                2,601                2,635

Prior year over provision                                                                                                                                                                 (54)                (242)

Total current tax                                                                                                                                                                         2,547                2,393

Deferred tax:                                                                                                                                                                                       

Origination and reversal of timing differences                                                                                                                               (106)                (115)

Effect of reduction in the rate of corporation tax                                                                                                                           (351)                (357)

Prior year under provision                                                                                                                                                                 22                   169

Total deferred tax                                                                                                                                                                       (435)                (303)

Total tax charge                                                                                                                                                                          2,112                2,090


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 25.5% (2011: 27.5%). The differences are reconciled below.

                                                                                                                                                                                        53 weeks ended   52 weeks ended
                                                                                                                                                                                             30 June 2012      25 June 2011
                                                                                                                                                                                                        £'000                  £'000

Profit on ordinary activities before tax                                                                                                                                           9,061                6,485


UK Corporation tax at average statutory rate 25.5% (2011: 27.5%)                                                                                            2,310                1,783

Expenses not deductible for tax purposes and non-taxable income                                                                                               307                   840

Capital allowances less than depreciation                                                                                                                                       147                   130

Short-term timing differences                                                                                                                                                              5                    (5)

Utilisation of tax losses                                                                                                                                                                    (46)                       -

Rolled over gains on asset disposals                                                                                                                                            (122)                (113)

Prior year over provision                                                                                                                                                                  (54)                (242)

                                                                                                                                                                                                       2,547                2,393

The exceptional profit on the disposal of properties of £649,000 (2011: £419,000) gives rise to a tax charge of £44,000 (2011: Nil) after the effect of rollover relief.



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 £4.4m (2011: £6.6m), based on a corporation tax rate of 24% (2011: 26%). At present it is not envisaged that any such tax will become payable in the foreseeable future.


The changes in the rate of corporation tax substantively enacted since the year-end and to be effected next year and thereafter will impact future tax charges. These include reductions in the statutory rate of corporation tax from 24% to 22% over two years. The effect of these changes has not been calculated.




3  Dividends

                                                                                                                                                                                         53 weeks ended   52 weeks ended
                                                                                                                                                                                             30 June 2012      25 June 2011
                                                                                                                                                                                                        £'000                  £'000

Declared and paid during the year

£1 'A' ordinary shares:                                                                                                                                                                          

Final dividend for 2011: 19.00p (2010: 18.35p)                                                                                                                             2,173                2,094

Interim dividend for 2012: 4.90p (2011: 4.80p)                                                                                                                                 560                   549

                                                                                                                                                                                                       2,733                2,643

2p 'B' ordinary shares:                                                                                                                                                                           

Final dividend for 2011: 0.380p (2010: 0.367p)                                                                                                                                258                   250

Interim dividend for 2012: 0.098p (2011: 0.096p)                                                                                                                               67                     65

                                                                                                                                                                                                          325                   315


Dividends paid                                                                                                                                                                                3,058                2,958


Proposed for approval at the 2012 AGM:                                                                                                                                       

Final dividend for 2012 on £1 'A' ordinary shares: 19.60p (2011: 19.00p)                                                                                   2,234                2,173

Final dividend for 2012 on 2p 'B' ordinary shares: 0.392p (2011: 0.380p)                                                                                       266                   258

                                                                                                                                                                                                       2,500                2,431

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

                                                                                                                                                                                        53 weeks ended   52 weeks ended
                                                                                                                                                                                             30 June 2012      25 June 2011
Based on £1 nominal share value                                                                                                                                                   £'000                  £'000

Profit attributable to equity shareholders                                                                                                                                       6,949                4,395


Weighted average share capital                                                                                                                                                  12,735              12,764

Dilutive outstanding options                                                                                                                                                                52                     54

Adjusted weighted average share capital                                                                                                                                   12,787              12,818

Basic                                                                                                                                                                                              54.6p                34.4p

Basic before exceptional items                                                                                                                                                     49.8p                46.2p

Diluted                                                                                                                                                                                            54.3p                34.2p

The earnings per share before exceptional items are calculated on profit after tax and before exceptional items of £6,344,000 (2011: £5,891,000).


5.  Accounts

The financial information set out above does not constitute the Group's statutory accounts for the 53 weeks ended 30 June 2012 or 52 weeks ended 25 June 2011 but is derived from those accounts. Statutory accounts for 2011 have been delivered to the Registrar of Companies and those for 2012 will be delivered following the Group'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.


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