Back to all announcements

DJ Shepherd Neame Limited Announcement of Full Year Results

TIDMSHEP

RNS Number : 3482K

Shepherd Neame Limited

21 September 2016

21 September 2016

SHEPHERD NEAME LIMITED

ANNOUNCEMENT OF FULL YEAR RESULTS

Shepherd Neame, Britain's Oldest Brewer, today announces results for the 52 weeks ended 25 June 2016.

Financial performance(1) :

   -      Record set of results and impressive progress against strategic objectives 
   -      Turnover increased by +1.2% to GBP139.9m (2015: GBP138.2m) 
   -      Underlying operating profit(2) up +3.5% at GBP14.2m (2015: GBP13.8m) 
   -      Underlying profit before tax(3) up +10.7% to GBP10.3m (2015: GBP9.3m) 
   -      Statutory profit before tax up +4.7% to GBP14.4m (2015: GBP13.7m) 

- Basic earnings per ordinary share up +13.1% to 84.0p (2015: 74.3p) and underlying basic earnings per share up +12.3% to 54.7p (2015: 48.7p)

- Proposed final dividend per share up +3.0% to 22.05p (2015: 21.40p) making total dividends for the year of 27.50p (2015: 26.70p)

Operational highlights:

   -      Strong performance across our pub estate 

- Like-for-like managed pub and hotel sales up +4.4%, with liquor up +3.1%, food up +4.2% and accommodation up +11.7%

   -     Like-for-like tenanted EBITDAR(4) up +2.7% 

- Core own and licensed beer volumes (excluding contract brewing) up +0.3%: with excellent growth from the Whitstable Bay Collection

- Increased investment in our pubs to GBP7.3m (2015: GBP6.5m) and GBP2.2m (2015: GBP2.1m) in repairs and decorations

Current trading:

- In the 10 weeks to 3 September 2016 like-for-like managed sales are up +8.2% and like-for-like EBITDAR from Tenanted pubs to 27 August is up +2.2%

   -      Core own and licensed beer volumes (excluding contract brewing) to 3 September up +1.2% 
   -      Acquisition of eight pubs from Enterprise Inns plc since the year end 

Jonathan Neame, Chief Executive, commented:

"I am delighted to report a record set of results, with managed pubs our key driver of growth, and an impressive performance against our strategic objectives.

In recent years, we have worked hard to improve the quality of our pub estate and modernise our brand portfolio. We have created a much stronger business with sustainable cashflows and the skills and ambition for further growth.

We have made a good start to the new financial year, with a particularly strong performance from our coastal pubs."

(1) First set of results prepared under new accounting standard Financial Reporting Standard 102(FRS102)

(2) Profit before net finance costs, any profit or loss on the disposal of properties, investment property fair value movements and exceptional items

(3) Profit before any profit or loss on the disposal of properties, investment property fair value movements and exceptional items

(4) Earnings before interest, tax, depreciation, amortisation and rent payable

For further information, please contact:

 
 
 Shepherd Neame Limited 
 Jonathan Neame, Chief Executive        Tel: 01795 
  Mark Rider, Finance and IT Director    532206 
 
   Kreab 
 Christina Clark / Venetia Stanley      Tel: 020 
                                         7074 1800 
                                         / 07776 171 
                                         210 
 
   Regional and Trade Media Contact: 
 John Humphreys                         Tel: 01795 542051 
                                         / 07793 294 469 
 

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

NOTES FOR EDITORS

Shepherd Neame is Britain's oldest brewer. Established in 1698 and based in Faversham, Kent it employs around 1,300 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 leading premium bottled ales in the UK with national distribution on draught (4.2% abv) and in bottle (4.5% abv). Spitfire Gold, a golden ale (4.1% abv), was launched to mark the 75(th) anniversary of the Battle of Britain and Spitfire Lager, the Lager of Britain (4.0% abv) has been launched in 2016.

- Whitstable Bay: This range, sold under the Faversham Steam Brewery brand, includes a Pale Ale on draught (3.9% abv) and in bottle (4% abv), an Organic Ale (4.5% abv), Blonde Lager (4.5% abv),Black Oyster Stout (4.2%) and Red IPA (4.5% abv).

   -     Bishops Finger: Connoisseur premium ale (5.4% abv). 
   -     Master Brew: The 'Original Kentish Ale' is a well-hopped cask ale (3.7% abv). 

The Company also brews lagers under license, including:

- Asahi Super Dry: Japan's number one beer (5% abv), which is produced under an exclusive UK license for brewing, sales and marketing.

- Samuel Adams Boston Lager: Leading US craft lager (4.8% abv) brewed under an exclusive license from the Boston Beer Company. The Company also imports Rebel IPA, a strong hopped US craft beer (6.5% abv) and Angry Orchard, America's No. 1 Hard Cider (5%).

In the 26 weeks ended 26 December 2015 Shepherd Neame sold 246,000 brewers' barrels of beer (71.0 million pints) including 211,000 brewers' barrels of own brewed beer (60.6 million pints) in the last year. The majority of these sales were made in the UK although the Company also exports to more than 35 countries.

At the year end, the Company operated 328 pubs, of which 267 were tenanted or leased, 7 were held as investment properties under commercial free of tie leases, and 54 managed. The pub estate ranges from inns and hotels to destination dining, great traditional and local community pubs.

Shepherd Neame's shares are traded on the ISDX Growth Market. See http://www.isdx.com/ for further information and the current share price.

For further information on the Company, see www.shepherdneame.co.uk.

CHAIRMAN'S STATEMENT

Overview

I am pleased to report another excellent year for the Company for the 52 weeks to 25 June 2016 with strong underlying growth.

The performance was characterised by good trading in our pub business and impressive growth in managed pubs' profits. This has driven strong operating cash flows which, together with exceptional proceeds from property disposals has created additional headroom to enable the business to grow further through pub acquisitions.

A key part of the strategy in recent years has been to modernise various aspects of the business, to drive operational excellence and update our brand and pub portfolio. I am delighted therefore to be able to introduce in this annual report the Company's new brand identity which has been developed in the last year.

Accounting Standards

This is our first full year report under the FRS 102 accounting standard, and as a consequence we have had to restate some prior year comparatives prepared under previous UK GAAP accounting rules.

There are four principal areas of change: the valuation of our assets; reporting by business segment and different accounting treatment for both lease commitments and for interest rate swaps. The specific impacts of these changes were set out in the transition document on 2 March 2016, which is available at www.shepherdneame.co.uk.

As part of this process, the Company has carried out a one-off revaluation of a significant proportion of its assets as at 28 June 2014 and incorporated this into our balance sheet. This has increased net assets and reduced balance sheet gearing. This revaluation was of the Company's trading licensed freehold assets only and excludes licensed leasehold assets and the brewery site. Assets that are held for rental income are valued separately as investment property at each reporting date.

Financial Performance

Turnover for the period increased by 1.2% to GBP139.9m (2015: GBP138.2m). Underlying operating profit grew by 3.5% to 14.2m (2015: GBP13.8m). Underlying profit before tax(1) grew by 10.7% to GBP10.3m (2015: GBP9.3m) and statutory profit before tax is up 4.7% to GBP14.4m (2015: GBP13.7m). Underlying basic earnings per share are up 12.3% to 54.7p (2015: 48.7p) and basic earnings per ordinary share are up 13.1% to 84.0p (2015: 74.3p).

Dividend

The Board is proposing a final dividend of 22.05p (2015: 21.40p), making the total dividend for the year 27.50p (2015: 26.70p), an increase of 3.0%. This represents underlying dividend cover of 2.0 times (2015: 1.8 times) which is in line with our stated policy following the share capital reorganisation of 2014. We will continue to target dividend cover at or above this level in the future. The final dividend will be paid on 14 October 2016 to shareholders on the register at the close of business on 7 October 2016.

Cash flow and Financing

Underlying EBITDA(2) was up 4.3% to GBP21.7m (2015: GBP20.8m). This helped fund capital expenditure in the core business of GBP10.7m (2015: GBP9.7m), the acquisition of three new pubs and an initial payment for the purchase of eight new pubs from Enterprise Inns plc. This acquisition of eight pubs was completed after the year end.

During the period we realised proceeds from property sales of GBP11.9m (2015: GBP3.2m) of which the principal was a one-off benefit from the sale of 10 acres of land remaining from the Company's farming business at Queen Court, outside Faversham. As a consequence of this disposal activity, year end net debt reduced by GBP8.7m to GBP60.1m giving headroom against our banking facilities of GBP19.9m plus a GBP5.0m overdraft.

[1] Profit before any profit or loss on the disposal of properties, investment property fair value movements and exceptional items

2 Underlying profit before tax pre net finance costs, depreciation, amortisation, profit or loss on sale of fixed assets excluding property and free trade loan discounts

Board of Directors

After more than 10 years of outstanding service to the Board, Oliver Barnes and James Leigh-Pemberton have both stepped down as Non-Executive Directors. We are delighted to welcome two new non-executives to the Board who both enjoy distinguished careers in their chosen fields and will bring additional expertise to the Board.

(MORE TO FOLLOW) Dow Jones Newswires

September 21, 2016 02:00 ET (06:00 GMT)

DJ Shepherd Neame Limited Announcement of Full Year -2-

Hilary Riva, OBE, 59, joined the Board in April 2016. Hilary has enjoyed a successful career in fashion retailing with various senior roles in the Arcadia Group followed by her jointly leading the buyout of Principles, Hawkshead, Warehouse and Racing Green as Managing Director of Rubicon Retail. Following the sale of Rubicon, Hilary was CEO of the British Fashion Council from 2005 to 2009. She is a Non-Executive Director at Shaftesbury plc, and at ASOS plc, the largest online fashion retailer, amongst other roles.

Richard Oldfield, DL, 60, joined the Board in June 2016. Richard is executive chairman of Oldfield Partners LLP, an investment management firm managing listed equities funds. He is also a Director of Witan Investment Trust plc and a trustee of the Royal Marsden Cancer Charity and the Clore Duffield Foundation.

I would like to take this opportunity to thank James and Oliver for their very significant individual contributions to the business. They have helped to steer the Company through some challenging times for the industry over the past 10 years and played a big part in helping the Company to achieve the strong position we are in today.

Following these changes, Bill Brett has been appointed Chair of the Remuneration Committee and Richard Oldfield, Chair of the Audit Committee.

Government and Regulation

During the year the Small Business Enterprise and Employment Bill completed its passage through Parliament and the Statutory Code of Practice for large pub companies (more than 500 pubs) became law on 21 July 2016. The smaller pub companies (fewer than 500 pubs) including Shepherd Neame simultaneously introduced new Voluntary Codes of Practice that apply to all our tenanted and leased pubs.

As announced in 2015, the Government introduced the National Living Wage from April 2016. The additional cost incurred by the business in this financial year was GBP0.1m. Future increases are due on an annual basis between now and 2020. The annual cost impact of this and the Apprenticeship Levy is estimated to rise to GBP1.1m by 2020. We were, however, pleased that beer duty was held level in the Budget and that further cuts to corporation tax are anticipated.

Summary

This has been an excellent year for the Company. The continuous investment in our brands and significant improvement in the profile and quality of our pub estate in recent years has transformed the business.

The managed pub estate has been our principal engine for growth whilst our tenanted pubs and brewing and brands deliver strong cash generation.

Strong trading and operational cash flows, cash proceeds from disposals and refinancing, have all helped to put the Company in a good position to seek further growth opportunities through acquisition. We are delighted by the purchase of eight pubs since the year end and continue to pursue other opportunities.

We live in uncertain political and economic times and consumer confidence is very sensitive to changes in sentiment. The outcome of the EU Referendum in June 2016 presents a degree of legal and economic uncertainty whilst the Government negotiates the UK's exit and we are mindful of the possibility of a slowdown in economic activity. Thus we retain a cautious approach at all times and focus on making the right investment decisions for the long term.

Finally I would like to pay tribute to the dedicated and highly talented staff who contribute so much to the success of the Company year after year and whose efforts we rely on greatly. I would also like to congratulate Chief Executive, Jonathan Neame on receiving the Publican's Morning Advertiser Outstanding Industry Contribution Award.

Miles Templeman

Chairman

CHIEF EXECUTIVE'S REVIEW

This has been another successful year for the Company. I am delighted to report a record set of results and impressive progress against our strategic objectives.

Over the last few years we have undertaken a series of initiatives to refine our strategy, modernise our processes and increase our investment to support the growth areas of the business. In particular we have transformed the overall profile of our pub estate by investing the proceeds of pub disposals to build a smaller, but high-quality and well-invested tenanted business, that is providing strong cash generation, and a managed business that has been our key driver for growth.

This has been achieved in a year when consumer demand to eat and drink out was impacted by long spells of wet and unseasonable weather and, in the second half of the year, concerns about the EU Referendum. Within our markets, when the conditions are right, such as at times of holidays or celebration, or fine and settled weather, trade has been very strong. The Rugby World Cup provided a modest benefit in October 2015 and we enjoyed strong trading over Christmas 2015. It is pleasing to note that to date since the EU referendum vote, we have not seen a reduction in consumer spend in our pubs.

Within our heartland, there has been increased economic activity with momentum in house building in areas of major development such as Ashford, the Medway Towns and Ebbsfleet Garden City.

In the UK beer market, volume recovered slightly in the year to June 2016 with growth of +1.2%(1) (2015: -2.4%) boosted by a strong final quarter. However, long-term trends continue to point to flat or slow decline in alcohol consumption, with a significant shift towards premium and craft products and increasing consumer demand for innovation in taste and flavour.

Within this overall market context we have made good progress towards our vision, which is to be a great British brewer and run the best pubs. At the same time, we have been developing a new brand identity for the business which we present for the first time in this report. The old logo has been in use for over 20 years and during that time the Company has changed substantially. Our beer range is more diverse and our pub portfolio appeals to a wider audience. We feel it is time, therefore, to introduce a more stylish and modern presentation of the Company logo across the business that articulates the real and original character of the business. We plan to roll out new signage across our pubs from the second half of the year and we will be upgrading to a more mobile friendly Company website in December.

(1) Source: The British Beer & Pub Association (BBPA)

Tenanted and Managed Pub Operations

Overview

At the year end we operated 328 pubs and hotels (2015: 338) of which 285 are freehold (2015: 295). Of our total pubs 54 (2015: 52) were managed and 267 (2015: 280) were tenanted or leased and seven (2015: six) operated under commercial free of tie leases.

In the last five years we have actively addressed the changes in the market to reduce our exposure to small wet-led community pubs and to take the opportunities for growth in casual dining and accommodation. We have transformed our pub portfolio through progressive property management, and continue to pursue every opportunity to raise the average quality.

During this five year period, we have acquired 15 pubs and disposed of 46. This follows a similar period of activity in the previous five years. Since 2011, the average EBITDAR per tenanted pub has increased by 25.6% and per managed pub by 42.2%.

Our investment focus is to seek high quality, single-site acquisition opportunities within our heartland if they improve the overall business or reach new markets. We also pursue opportunities outside our historic trading area as evidenced by recent pub purchases. We are looking to acquire sites with unique character in landmark or high footfall locations with the potential for further development.

During the year we acquired three new outlets, of which two are operated as managed pubs: the Minnis Bay Bar and Restaurant and the Anchor, Hampstead Lock, Yalding. We have now secured planning permission to develop these sites and work will be carried out during the coming year. The third acquisition was the Coastguard in St. Margaret's Bay in January 2016, which opened after a transformational development in March and is operated as a tenanted pub.

These three acquisitions cost GBP3.3m (2015: two pubs and the freehold of an existing pub for GBP3.4m). We have raised gross proceeds of GBP11.9m (2015: GBP3.2m) from the disposal of 13 pubs (2015: 11 pubs) and seven unlicensed properties and land holdings (2015: one unlicensed property), of which the largest was the 10 acres of land at Queen Court, outside Faversham, sold for GBP7.4m.

Since the year end, we have acquired eight freehold pubs in Kent, Sussex and Surrey from Enterprise Inns plc that are operated under leases. These are all high-quality pubs and will benefit from further investment. The pubs are: the Chequer Inn in Steyning, West Sussex; the Crown and Anchor in Shoreham by Sea, West Sussex; Earls in Maidstone, Kent; the Farm House in West Malling, Kent; The Greyhound in Keston, Kent; Hen and Chickens in Bisley, Surrey; The Kings Head in Guildford, Surrey and The Sussex Oak in Warnham, West Sussex.

Also since the year end, the Company has acquired UES Ltd, a successful business owned and managed by Dan Sidders and Gareth Finney, who operated five of our existing pubs in Faversham and Canterbury under tenancy. All five of these pubs have transferred to the managed estate and a further pub, the Cock and Woolpack in Finch Lane, London EC3, has been transferred from tenancy.

The combined investment in these two acquisitions (both of which completed in July 2016) was GBP13.4m and as a result there will be an increase in net debt in 2017.

Pub Strategy

Our pub strategy is built around three strategic pillars:

-- To drive footfall to our pubs

-- To develop our offer to enhance the customer experience

-- To attract, retain and develop the best people

Driving footfall to our Pubs

We aim to drive footfall by designing and developing unique pubs and hotels with a 'wow' factor.

(MORE TO FOLLOW) Dow Jones Newswires

September 21, 2016 02:00 ET (06:00 GMT)

DJ Shepherd Neame Limited Announcement of Full Year -3-

In addition to the new pub acquisitions we have invested GBP7.3m (2015: GBP6.5m) in improving the look and feel of our pubs and GBP2.2m (2015: GBP2.1m) in repairs and decorations.

In the managed estate, major developments during the year have included a GBP1.2m redevelopment of the Ship & Trades in Chatham Maritime to create 15 stylish rooms and a superb restaurant overlooking the marina. In addition, a GBP0.7m extension to the restaurant at the Royal Albion in Broadstairs has added more restaurant covers with sea views. Initial trade in both outlets since re-opening has been strong.

In the tenanted estate, we have carried out major developments at a number of sites including the Poyntz Arms, East Molesey; the White Horse in Maldon; the William the Conqueror, Rye Harbour and the Adelaide, Teddington.

Developing our offer to enhance the customer experience

We aim to enhance the customer experience in our pubs by delivering great fresh food, providing accommodation of character, and offering an interesting range of products.

Our food continues to provide good growth in the business. In the managed estate, footfall from diners increased by +7.7% (2015: +9.6%) and spend per head by +3.9% (2015: +0.3%) to GBP11.96 (2015: GBP11.51).

We continue to develop initiatives to drive the quality of our menus and food presentation. With Dan and Gareth joining us following the acquisition of UES Ltd, we have strengthened the skills and resources in this area to serve a larger managed pub estate. We have upgraded till and back office systems to enable improved booking and table management at the Ship & Trades, Chatham Maritime as a pilot for a potential future roll-out.

During the year we have refurbished 39 bedrooms across the managed estate (2015: 68) and now offer a total of 283 rooms (2015: 279) presented to a very high standard. In the coming year we will add 11 rooms at the Ostrich in Colnbrook. Occupancy remained at the record high of 78% (2015: 78%) whilst RevPAR continued to grow by +8.6% (2015: +11.5%) to GBP63 (2015: GBP58).

Wine volume in our pubs has been good throughout the year. We have updated our popular Añuela and Mezzora ranges and expanded our supply of local quality English wines. Spirits too have seen a resurgence as we have introduced more premium, stylish and craft products. We have enhanced our range of premium mixers and local juices. All these actions strengthen the experience for those drinking or eating in our pubs.

Attracting, retaining and developing the best people

We aim to attract, retain and develop the best people, by understanding the potential in everyone, inspiring them to achieve their goals, and by building the loyalty and engagement of our licensees, through the professionalism of the support we provide.

In our managed estate we have appointed five head chefs to act as mentors, recruited an additional field trainer and further developed staff skills through e-learning. Our tenanted estate was fully let at the year end with new licensees being required for less than 6% of the total estate. Retention levels are rising as the quality of facility and level of support makes our tenanted offer increasingly commercially attractive.

I was particularly pleased that the Company scored strongly against a range of measures in an independent survey of pub companies. We were also finalists in the Publican Awards Best Tenanted and Leased Pub Company (201+ sites) and in the Best Food Offer (51+ sites).

The Shepherd Neame Pub Awards continue to recognise excellence in a variety of aspects and every year the standards reach higher levels. I would like to congratulate all this year's winners, in particular Lee Walker of the Britannia in Guildford who won the Pub of the Year Award and Robert and Donna Taylor at the Compasses in Crundale who won the Tenanted Pub of the Year and numerous national accolades. Particular mention should go to Steve and Phil Harris at the Sportsman at Seasalter who won the National Restaurant of the Year 2016 and Gastro Pub of the Year, a remarkable achievement.

Trading Performance

We have consistently pursued a strategy to invest in our pubs and this has resulted in a strong trading performance this year on the back of several years of sustained growth.

Total divisional turnover in the managed estate grew by +9.8% to GBP48.1m (2015: GBP43.8m) and divisional underlying operating profit grew by +13.7% to GBP7.6m (2015: GBP6.7m). Same outlet like-for-like sales grew by +4.4% (2015: +6.1%) with liquor +3.1% (2015: +4.3%), food +4.2% (2015: +7.0%) and accommodation +11.7% (2015: +13.8%). Average EBITDAR per managed pub grew by +1.0% (2015: +7.1%).

Total divisional turnover in the tenanted and leased estate grew by +0.3% to GBP33.5m (2015: GBP33.4m) on 13 fewer outlets. Divisional underlying operating profit was GBP12.6m (2015: GBP12.8m). Like-for-like EBITDAR per tenanted pub grew by +2.7% (2015: +2.4%). Average EBITDAR per tenanted pub grew by +6.4% (2015: +4.1%).

Brewing and Brands

Overview

The Brewing and Brands business absorbed the first full year costs of the water treatment plant and the final impact of the loss of the Kingfisher contract. After a disappointing first half, performance improved in the second half with some excellent distribution gains.

The UK beer market has seen significant changes in recent years as the growing demand for local products with wider taste and flavour profiles has led to a rapid expansion in the number of micro and craft brewers entering the market even though overall beer consumption is broadly flat. Shepherd Neame has responded well to this challenge and built an enviable portfolio of great beers such as Spitfire, Bishops Finger, the Whitstable Bay and Classic Collections.

Brewing and Brands Strategy

Our Brewing and Brands Strategy is built on two strategic pillars:

-- To create demand and build awareness for our brands

-- To attract, retain and develop the best people.

Creating demand and building awareness for our brands

We aim to create demand and build awareness for our brands by developing a range of distinctive beers, instilling a passion for quality and having great engagement with our customers.

Recent range developments have proved to be very successful. In particular, the Whitstable Bay Collection enjoyed excellent growth, with a strong performance from Whitstable Bay Blonde Lager. I am particularly pleased that our Whitstable Bay design and brand development has won a 2016 Brand Effectiveness Award.

The Spitfire brand has performed better in the last year but still experienced a modest decline. The portfolio has been significantly enhanced by the successful launch of Spitfire Gold in the early part of the year and Spitfire Lager, the Lager of Britain, towards the end.

Our Heritage beers have performed well again, in particular the Classic Collection brews such as Double Stout and IPA.

The licensed portfolio has continued to do well with accelerating growth from Samuel Adams Boston Lager as we have won some distribution gains in high-profile restaurant groups and another strong performance from Asahi Super Dry. Angry Orchard, America's No.1 Hard Cider, has made an encouraging start since launch.

Shepherd Neame has been brewing and selling Asahi Super Dry under licence in the UK for more than 10 years with an existing contract in place to the end of 2017. The proposed purchase of the Peroni, Grolsch and Meantime Brewing businesses by Asahi Group Holdings is subject to shareholder approval and we remain in discussions with Asahi over the future of our partnership.

The investment focus in the last year has been to modernise the Brewhouse. After more than 100 years, our wooden mash tuns have been replaced and we have embarked on a major refurbishment of the fabric of our historic brewery buildings. Simultaneously we have replaced the glycol system and upgraded our quality processes. All these initiatives will help drive ever higher standards of quality and consistency, and I am particularly pleased that since the year end we have won seven awards for our brewing and bottling quality.

Attracting, retaining and developing the best people

During the last year we have strengthened the brewing and laboratory management team. In addition, we have developed our management training and enhanced our programme to improve communication across the business and awareness of the Company's strategic aims and objectives. The annual Shepherd Neame Employee Awards help to focus and reward those that have achieved the standards we require. We have successfully raised the knowledge of brewing and beer styles across the Company through our Love Beer programme.

Trading Performance

Divisional turnover for the year was down -4.1% to GBP57.3m (2015: GBP59.7m), of which Kingfisher accounted for almost all of the decline. Total own brewed beer sold was down -6.2% (2015: -8.4%). Own beer volume excluding contract showed modest growth at +0.3% (2015: +0.1%). Divisional underlying operating profit was GBP1.5m (2015: GBP1.8m). Cash generation in this part of the business remained robust.

Current Trading

We have made a good start to the new financial year, with a particularly strong performance from our coastal pubs during the fine summer weather. Recent pub investments have performed well and our newly acquired outlets have been integrated into the business and are performing in line with expectation.

For the 10 weeks to 3 September 2016 like-for-like managed sales are up +8.2% (2015: +6.5%), like-for-like EBITDAR in the tenanted estate to 27 August is up +2.2% (2015: +1.8%). Total beer volume is up +1.1% (2015: -3.8%) with own beer volume excluding contract up +1.2% (2015: +8.6%).

Summary

We have ended the year with a strong financial performance, with opportunities to drive further growth in the business.

(MORE TO FOLLOW) Dow Jones Newswires

September 21, 2016 02:00 ET (06:00 GMT)

DJ Shepherd Neame Limited Announcement of Full Year -4-

We have worked hard in recent years to improve the quality of our pub estate and modernise our brand portfolio. We have created a much stronger business with sustainable cash flows and the skills and ambition for further growth. The launch of our new brand identity will present some exciting opportunities to strengthen our engagement with consumers in the year ahead.

General political and economic uncertainty is likely to continue for the next few years as a consequence of the UK's exit from the European Union, but Shepherd Neame, with its strong UK focus, is well positioned to withstand the impact. We will continue to invest for the long term to deliver against our aims to be a great British brewer and to run the best pubs.

Jonathan Neame

Chief Executive

Profit and loss account

52 weeks ended 25 June 2016

 
                                          52 weeks to 25 June                     52 weeks to 27 June 
                                                  2016                                    2015 
                                                    Items                                   Items 
                                                 excluded                                excluded 
                                                     from                                    from 
                                 Underlying    underlying        Total   Underlying    underlying        Total 
                                    results       results    statutory      results       results    statutory 
                          note      GBP'000       GBP'000      GBP'000      GBP'000       GBP'000      GBP'000 
-----------------------  -----  -----------  ------------  -----------  -----------  ------------  ----------- 
 Turnover                  1,2      139,890             -      139,890      138,237             -      138,237 
 Operating charges           3    (125,655)         (495)    (126,150)    (124,479)          (63)    (124,542) 
-----------------------  -----  -----------  ------------  -----------  -----------  ------------  ----------- 
 Operating profit            1       14,235         (495)       13,740       13,758          (63)       13,695 
 Net finance costs                  (3,898)             -      (3,898)      (4,424)             -      (4,424) 
 Profit on disposal 
  of property                3            -         4,235        4,235            -           354          354 
 Investment property 
  fair value movements       3            -           282          282            -         4,086        4,086 
-----------------------  -----  -----------  ------------  -----------  -----------  ------------  ----------- 
 Profit on ordinary 
  activities before 
  taxation                           10,337         4,022       14,359        9,334         4,377       13,711 
 Taxation                    4      (2,254)           314      (1,940)      (2,134)         (600)      (2,734) 
-----------------------  -----  -----------  ------------  -----------  -----------  ------------  ----------- 
 Profit after taxation                8,083         4,336       12,419        7,200         3,777 
-----------------------  -----  -----------  ------------  -----------  -----------  ------------  ----------- 
 Earnings per 50p 
  ordinary share 
 Basic                       6                                   84.0p                                   74.3p 
 Underlying basic            6                                   54.7p                                   48.7p 
 Diluted                     6                                   83.4p                                   73.8p 
-----------------------  -----  -----------  ------------  -----------  -----------  ------------  ----------- 
 

Statement of comprehensive income

52 weeks ended 25 June 2016

 
                                               52 weeks   52 weeks 
                                                  ended      ended 
                                                25 June    27 June 
                                                   2016       2015 
                                        note    GBP'000    GBP'000 
-------------------------------------  -----  ---------  --------- 
 Profit after taxation                           12,419     10,977 
-------------------------------------  -----  ---------  --------- 
 Losses arising on cash flow hedges 
  during the period                             (5,887)    (2,263) 
 Tax relating to components of other 
  comprehensive income                     4      1,521        453 
-------------------------------------  -----  ---------  --------- 
 Other comprehensive losses                     (4,366)    (1,810) 
-------------------------------------  -----  ---------  --------- 
 Total comprehensive income                       8,053      9,167 
-------------------------------------  -----  ---------  --------- 
 

Balance sheet

As at 25 June 2016

 
                                              25 June    27 June 
                                                 2016       2015 
------------------------------------------ 
                                              GBP'000    GBP'000 
---------------------------------------     ---------  --------- 
 Fixed assets 
 Tangible fixed assets                        279,872    279,247 
 Investments and loans                            333        713 
------------------------------------------  ---------  --------- 
                                              280,205    279,960 
   ---------------------------------------  ---------  --------- 
 Current assets 
 Stocks                                         6,580      7,001 
 Debtors                                       18,114     16,103 
 Deferred tax asset 
  due after one year                            4,409      3,965 
 Cash                                              90      6,793 
------------------------------------------  ---------  --------- 
                                               29,193     33,862 
   ---------------------------------------  ---------  --------- 
 Creditors: amounts falling due within 
  one year 
 Bank loans and overdrafts                      (727)    (1,987) 
 Creditors                                   (26,703)   (24,156) 
------------------------------------------  ---------  --------- 
                                             (27,430)   (26,143) 
   ---------------------------------------  ---------  --------- 
 Net current assets                             1,763      7,719 
------------------------------------------  ---------  --------- 
 Total assets less current liabilities        281,968    287,679 
 Creditors: amounts falling due after 
  more than one year 
 Bank loans                                  (59,439)   (73,592) 
 Derivative financial instruments            (23,670)   (17,783) 
 Deferred lease liability                     (1,831)    (1,640) 
 Provision for liabilities                   (13,151)   (14,838) 
------------------------------------------  ---------  --------- 
 Net assets                                   183,877    179,826 
------------------------------------------  ---------  --------- 
 
 Capital and reserves 
 Called-up share capital                        7,429      7,429 
 Share premium account                          1,099      1,099 
 Revaluation reserve                           73,253     72,430 
 Reserve for own shares held                    (915)      (827) 
 Hedging reserve                             (19,288)   (14,226) 
 Profit and loss account                      122,299    113,921 
------------------------------------------  ---------  --------- 
 Equity shareholders' funds                   183,877    179,826 
------------------------------------------  ---------  --------- 
 

These accounts for Shepherd Neame Limited (Registered in England number 138256) were approved by the Board of Directors on 14 September 2016 and were signed on its behalf by:

Miles Templeman

Jonathan Neame

Directors

Statement of changes in equity

52 weeks ended 25 June 2016

 
 
                                                                                          Profit 
                                                                       Own                   and     Total 
                                  Share      Share   Revaluation    shares    Hedging       loss 
                                capital    premium       reserve      held    reserve    account 
                                GBP'000    GBP'000       GBP'000   GBP'000    GBP'000    GBP'000   GBP'000 
----------------------------  ---------  ---------  ------------  --------  ---------  ---------  -------- 
 Balance at 28 June 
  2014 as previously 
  stated                          7,429      1,099        13,125     (908)          -    108,006   128,751 
 Changes on transition 
  to FRS102                           -          -        60,167         -   (12,416)    (1,985)    45,766 
----------------------------  ---------  ---------  ------------  --------  ---------  ---------  -------- 
 Balance at 28 June 
  2014 as restated                7,429      1,099        73,292     (908)   (12,416)    106,021   174,517 
 
 Profit for the financial 
  year                                -          -             -         -          -     10,977    10,977 
 Losses arising on 
  cash flow hedges during 
  the year                            -          -             -         -    (2,263)          -   (2,263) 
 Tax relating to components 
  of other comprehensive 
  income                              -          -             -         -        453          -       453 
----------------------------  ---------  ---------  ------------  --------  ---------  ---------  -------- 
 Total comprehensive 
  income                              -          -             -         -    (1,810)     10,977     9,167 
 Ordinary dividends 
  paid                                -          -             -         -          -    (3,861)   (3,861) 
 Transfer of realised 

(MORE TO FOLLOW) Dow Jones Newswires

September 21, 2016 02:00 ET (06:00 GMT)

DJ Shepherd Neame Limited Announcement of Full Year -5-

  revaluation                         -          -         (862)         -          -        862         - 
 Accrued share-based 
  payments                            -          -             -         -          -        425       425 
 Purchase of own shares               -          -             -     (465)          -          -     (465) 
 Distribution of own 
  shares                              -          -             -       405          -      (362)        43 
 Unconditionally vested 
  share awards                        -          -             -       141          -      (141)         - 
----------------------------  ---------  ---------  ------------  --------  ---------  ---------  -------- 
 Balance at 27 June 
  2015                            7,429      1,099        72,430     (827)   (14,226)    113,921   179,826 
 
 Profit for the financial 
  year                                -          -             -         -          -     12,419    12,419 
 Losses arising on 
  cash flow hedges during 
  the year                            -          -             -         -    (5,887)          -   (5,887) 
 Tax relating to components 
  of other comprehensive 
  income                              -          -           696         -        825          -     1,521 
----------------------------  ---------  ---------  ------------  --------  ---------  ---------  -------- 
 Total comprehensive 
  income                              -          -           696         -    (5,062)     12,419     8,053 
 Ordinary dividends 
  paid                                -          -             -         -          -    (3,977)   (3,977) 
 Transfer of realised 
  revaluation                         -          -           127         -          -      (127)         - 
 Accrued share-based 
  payments                            -          -             -         -          -        528       528 
 Purchase of own shares               -          -             -     (584)          -          -     (584) 
 Distribution of own 
  shares                              -          -             -       359          -      (328)        31 
 Unconditionally vested 
  share awards                        -          -             -       137          -      (137)         - 
----------------------------  ---------  ---------  ------------  --------  ---------  ---------  -------- 
 Balance at 25 June 
  2016                            7,429      1,099        73,253     (915)   (19,288)    122,299   183,877 
----------------------------  ---------  ---------  ------------  --------  ---------  ---------  -------- 
 
 
 

Cash flow statement

52 weeks ended 25 June 2016

 
                                              52 weeks              52 weeks 
                                                 ended                 ended 
                                               25 June               27 June 
                                                  2016                  2015 
                                    GBP'000    GBP'000    GBP'000    GBP'000 
 -------------------------------  ---------  ---------  ---------  --------- 
 Net cash flows from operating 
 activities (see note 6a)                       20,293                21,375 
 
 Cash flows from investing 
  activities 
 Proceeds of sale of tangible 
  fixed assets                       11,893                 3,155 
 Purchase of tangible fixed 
  assets                           (15,391)              (13,165) 
 Additional loans to customers         (21)                  (52) 
 Customer loan redemptions              245                   173 
                                  ---------             --------- 
 Net cash flows from investing 
 activities                                    (3,274)               (9,889) 
 
 Cash flows from financing 
  activities 
 Dividends paid                     (3,977)               (3,861) 
 Interest paid                      (3,904)               (4,391) 
 Repayment of long-term loan       (16,000)               (2,000) 
 Issue costs of new long-term 
  facility                            (313)                     - 
 Purchase of own shares               (287)                 (465) 
 Share option proceeds                   32                    43 
 Net cash flows from financing 
 activities                                   (24,449)              (10,674) 
--------------------------------  ---------  ---------  ---------  --------- 
 Net (decrease)/increase 
 in cash and cash equivalents                  (7,430)                   812 
--------------------------------  ---------  ---------  ---------  --------- 
 Cash and cash equivalents 
  at beginning of the period                     6,793                 5,981 
--------------------------------  ---------  ---------  ---------  --------- 
 Cash and cash equivalents 
  at end of the period                           (637)                 6,793 
--------------------------------  ---------  ---------  ---------  --------- 
 

Notes to the accounts

25 June 2016

1 Segmental reporting

In adopting FRS 102, the operating segment disclosure requirements of IFRS 8 are required as the Company has publically traded equity instruments. The standard is applied retrospectively. The accounting policy for identifying segments is based on internal management reporting information that is regularly reviewed by the chief operating decision-maker.

The Company has three operating segments, which are largely organised and managed separately according to the nature of the products and services provided and the profile of the customers:

-- Brewing and Brands which comprises the brewing, marketing and sales of beer, wine and spirits;

-- Managed Pubs and Hotels which comprises managed pubs and managed hotels and;

-- Tenanted and Leased Pubs which comprises pubs operated by third parties under tenancy or lease agreements.

Transfer prices between operating segments are set on an arm's length basis.

The measurement policies the Company uses for segment reporting under IFRS 8 are the same as those used in the financial statements.

 
 
                                    Brewing       Managed      Tenanted 
                                        and          Pubs    and Leased 
                                     Brands    and Hotels          Pubs   Unallocated     Total 
 52 weeks ended 25 June             GBP'000       GBP'000       GBP'000       GBP'000   GBP'000 
  2016 
---------------------------------  --------  ------------  ------------  ------------  -------- 
 Turnover                            57,267        48,062        33,509         1,052   139,890 
---------------------------------  --------  ------------  ------------  ------------  -------- 
 Underlying operating profit          1,479         7,581        12,598       (7,423)    14,235 
 Exceptional items                        -             -         (307)         (188)     (495) 
---------------------------------  --------  ------------  ------------  ------------  -------- 
 Divisional operating profit          1,479         7,581        12,291       (7,611)    13,740 
 
 Net finance costs                                                                      (3,898) 
 Profit on disposal of 
  property                                                                                4,235 
 Investment property fair 
  value movements                                                                           282 
---------------------------------  --------  ------------  ------------  ------------  -------- 
 Profit on ordinary activities 
 before taxation                                                                         14,359 
---------------------------------  --------  ------------  ------------  ------------  -------- 
 
 
 Other segment information 
 Capital expenditure - 
  tangible fixed assets       2,374   6,055    6,774       436   15,639 
 Depreciation                 2,172   2,016    2,028       899    7,115 
 Underlying divisional 
  EBITDA                      3,880   9,677   14,642   (6,521)   21,678 
 Number of pubs                   -      54      267         7      328 
 
 
                                    Brewing       Managed      Tenanted 
                                        and          Pubs    and Leased 
                                     Brands    and Hotels          Pubs   Unallocated     Total 
 52 weeks ended 27 June             GBP'000       GBP'000       GBP'000       GBP'000   GBP'000 
  2015 
---------------------------------  --------  ------------  ------------  ------------  -------- 
 Turnover                            59,718        43,759        33,424         1,336   138,237 
---------------------------------  --------  ------------  ------------  ------------  -------- 
 Underlying operating profit          1,823         6,665        12,751       (7,481)    13,758 
 Exceptional items                        -             -          (63)             -      (63) 
---------------------------------  --------  ------------  ------------  ------------  -------- 
 Divisional operating profit          1,823         6,665        12,688       (7,481)    13,695 
 
 Net finance costs                                                                      (4,424) 
 Profit on disposal of 
  property                                                                                  354 
 Investment property fair 
  value movements                                                                         4,086 
---------------------------------  --------  ------------  ------------  ------------  -------- 
 Profit on ordinary activities 
 before taxation                                                                         13,711 
---------------------------------  --------  ------------  ------------  ------------  -------- 
 
 
                              Brewing       Managed      Tenanted 
                                  and          Pubs    and Leased 
                               Brands    and Hotels          Pubs   Unallocated     Total 

(MORE TO FOLLOW) Dow Jones Newswires

September 21, 2016 02:00 ET (06:00 GMT)

DJ Shepherd Neame Limited Announcement of Full Year -6-

 52 weeks ended 27 June       GBP'000       GBP'000       GBP'000       GBP'000   GBP'000 
  2015 
---------------------------  --------  ------------  ------------  ------------  -------- 
 Other segment information 
 Capital expenditure - 
  tangible fixed assets         1,827         6,382         4,180           625    13,014 
 Depreciation                   2,306         1,825         1,958           722     6,811 
 Underlying divisional 
  EBITDA                        4,368         8,464        14,709       (6,757)    20,784 
 Number of pubs                     -            52           280             6       338 
 

Geographical information

An analysis of the Company's turnover by geographical market is set out below:

 
                      52 weeks   52 weeks 
                         ended      ended 
                       25 June    27 June 
                          2016       2015 
                       GBP'000    GBP'000 
-------------------  ---------  --------- 
 UK                    137,424    134,966 
 Rest of the World       2,466      3,271 
-------------------  ---------  --------- 
                       139,890    138,237 
-------------------  ---------  --------- 
 

2 Turnover

An analysis of the Company's turnover is as follows:

 
                               52 weeks   52 weeks 
                                  ended      ended 
                                25 June    27 June 
                                   2016       2015 
                                GBP'000    GBP'000 
----------------------------  ---------  --------- 
 Sale of goods and services     131,253    129,531 
 Rental income                    8,637      8,706 
----------------------------  ---------  --------- 
                                139,890    138,237 
----------------------------  ---------  --------- 
 

3 Non-GAAP reporting measures

Certain items recognised in reported profit or loss before tax can vary significantly from year to year and therefore create volatility in reported earnings which does not reflect the underlying performance of the Company. The Directors believe that the "underlying operating profit", "underlying profit before tax", "underlying basic earnings per share", "underlying earnings before interest, tax, depreciation, and amortisation" presented provide a clear and consistent presentation of the underlying performance of ongoing business for shareholders. Underlying profit is not defined by FRS 102 and therefore may not be directly comparable with the "adjusted" profit measures of other companies. The adjusted items are:

-- Profit or loss on disposal of properties

-- Investment property fair value movements

-- Exceptional items - these are items which are either material or infrequent in nature and do not relate to the underlying performance.

 
                                                  52 weeks   52 weeks 
                                                     ended      ended 
                                                   25 June    27 June 
                                                      2016       2015 
                                                   GBP'000    GBP'000 
-----------------------------------------------  ---------  --------- 
 Underlying EBITDA                                  21,678     20,784 
 Depreciation                                      (7,115)    (6,811) 
 Free trade loan discounts                           (113)      (136) 
 Loss on sale of assets (excluding property)         (215)       (79) 
-----------------------------------------------  ---------  --------- 
 Underlying operating profit                        14,235     13,758 
 Net finance costs                                 (3,898)    (4,424) 
-----------------------------------------------  ---------  --------- 
 Underlying profit before tax                       10,337      9,334 
 
 Profit on disposal of properties                    4,235        354 
 Investment property fair value movements              282      4,086 
 Exceptional items                                   (495)       (63) 
-----------------------------------------------  ---------  --------- 
 Profit on ordinary activities before taxation      14,359     13,711 
-----------------------------------------------  ---------  --------- 
 

Exceptional items of GBP495,000 for the 52 weeks ended 25 June 2016 comprised an impairment charge of GBP307,000, legal and professional fees of GBP71,000 for the Consumer Credit Authorisation application, required by the Financial Conduct Authority; and GBP117,000 for the professional fees related to the transition for reporting under FRS 102. The charge of GBP63,000 for the 52 weeks ended 27 June 2015 relates to impairment of tangible fixed assets.

4 Taxation

a Tax on profit on ordinary activities

 
                                                   52 weeks   52 weeks 
                                                      ended      ended 
                                                    25 June    27 June 
                                                       2016       2015 
 Tax charged to profit and loss                     GBP'000    GBP'000 
------------------------------------------------  ---------  --------- 
 Current tax 
 UK Corporation tax at 20.0% (2015: 20.75%)           2,573      2,270 
 Prior year under/(over) provision                       25       (19) 
------------------------------------------------  ---------  --------- 
 Total current tax                                    2,598      2,251 
------------------------------------------------  ---------  --------- 
 Deferred tax 
 Origination and reversal of timing differences          40        493 
 Effect of reduction in the rate of corporation 
  tax                                                 (698)          - 
 Adjustments in respect of prior years                    -       (10) 
------------------------------------------------  ---------  --------- 
 Total deferred tax                                   (658)        483 
------------------------------------------------  ---------  --------- 
 Total tax charged to profit and loss                 1,940      2,734 
------------------------------------------------  ---------  --------- 
 
 Tax charged to other comprehensive income 
------------------------------------------------  ---------  --------- 
 Deferred tax 
 Losses arising on cash flow hedges in 
  the period                                        (1,177)      (453) 
 Effect of reduction in the rate of corporation 
  tax                                                 (344)          - 
------------------------------------------------  ---------  --------- 
 Total tax charged to other comprehensive 
  income                                            (1,521)      (453) 
------------------------------------------------  ---------  --------- 
 
   b   Reconciliation of the total tax charge 
 
                                                   52 weeks   52 weeks 
                                                      ended      ended 
                                                    25 June    27 June 
                                                       2016       2015 
                                                    GBP'000    GBP'000 
------------------------------------------------  ---------  --------- 
 Profit on ordinary activities before tax            14,359     13,711 
------------------------------------------------  ---------  --------- 
 
 UK corporation tax at average statutory 
  rate 20.0% (2015: 20.75%)                           2,872      2,845 
 Expenses not deductible for tax purposes                 7         68 
 Profit on sale of property less chargeable 
  gains                                               (266)      (150) 
 Effect of reduction in the rate of corporation 
  tax                                                 (698)          - 
 Prior year under/(over) provision                       25       (29) 
------------------------------------------------  ---------  --------- 
 Total tax charge to profit and loss                  1,940      2,734 
------------------------------------------------  ---------  --------- 
 
   c   Factors that may affect future tax charges 

During the period the Finance Act 2015 received Royal Assent. The main impact was the reduction of the UK Corporation tax rate from 20% to 19% (effective from 1 April 2017) and 18% (effective from 1 April 2020). To the extent that these rate changes will affect the amount of future tax cash tax payments to be made by the Company, this will reduce the size of both the Company's deferred tax liability and tax asset. The impact in the 52 weeks to 25 June 2016 was an exceptional credit to profit and loss of GBP698,000 and a credit to other comprehensive income of GBP344,000. A further reduction in the UK corporation tax rate from 1 April 2020 to 17% has been announced but has not yet been substantively enacted.

During the 52 weeks beginning 26 June 2016, the net reduction of deferred tax liabilities expected to be credited to the profit and loss account is estimated at GBP500,000 due to the reversal of accelerated capital allowances and reduction in the deferred tax liability on the revaluation of freehold pubs.

There is no expiry date on timing differences.

(MORE TO FOLLOW) Dow Jones Newswires

September 21, 2016 02:00 ET (06:00 GMT)

DJ Shepherd Neame Limited Announcement of Full Year -7-

5 Dividends

 
                                            52 weeks   52 weeks 
                                               ended      ended 
                                             25 June    27 June 
                                                2016       2015 
                                             GBP'000    GBP'000 
-----------------------------------------  ---------  --------- 
 Declared and paid during the year 
 Final dividend for 2015: 21.4p (2014: 
  20.75p) per ordinary share                   3,168      3,074 
 Interim dividend for 2016: 5.45p (2015: 
  5.30p) per ordinary share                      809        787 
-----------------------------------------  ---------  --------- 
 Dividends paid                                3,977      3,861 
-----------------------------------------  ---------  --------- 
 

The Directors propose a final dividend of 22.05p (2015: 21.40p) per 50p ordinary share totalling GBP3,269,000 (2015: GBP3,168,000) for the year

ended 25 June 2016. The dividend is subject to approval by the shareholders at the Annual General Meeting, to be held on 14 October 2016

and has not been included as a liability in these financial statements, as it has not yet been approved or paid.

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.

6 Earnings per share

 
                                                           52 weeks               52 weeks 
                                                              ended                  ended 
                                                            25 June                27 June 
                                                               2016                   2015 
                                                            GBP'000                GBP'000 
--------------------------------------------  ---------------------  --------------------- 
 Profit attributable to equity shareholders                  12,419                 10,977 
 Items excluded from underlying results                     (4,336)                (3,777) 
--------------------------------------------  ---------------------  --------------------- 
 Underlying earnings attributable to equity 
  shareholders                                                8,083                  7,200 
 
                                                             Number                 Number 
--------------------------------------------  ---------------------  --------------------- 
 Weighted average number of shares in issue                  14,779                 14,770 
 Dilutive outstanding options                                   113                    113 
--------------------------------------------  ---------------------  --------------------- 
 Diluted weighted average share capital                      14,892                 14,883 
--------------------------------------------  ---------------------  --------------------- 
 Basic                                                        84.0p                  74.3p 
 Underlying basic                                             54.7p                  48.7p 
 Diluted                                                      83.4p                  73.8p 
--------------------------------------------  ---------------------  --------------------- 
 

The earnings per share calculation is based on earnings from continuing operations and on the weighted average ordinary share capital which excludes shares held by trusts in respect of employee incentive plans and options.

6 Notes to the cash flow statement

a Reconciliation of operating profit to cash generated by operations

 
                                            52 weeks ended                       52 weeks ended 
                                             25 June 2016                         27 June 2015 
                                                  Excluded                             Excluded 
                                                      from                                 from 
                                  Underlying    underlying             Underlying    underlying 
                                     results       results     Total      results       results     Total 
                                     GBP'000       GBP'000   GBP'000      GBP'000       GBP'000   GBP'000 
-------------------------------  -----------  ------------  --------  -----------  ------------  -------- 
 Operating profit                     14,235         (495)    13,740       13,758          (63)    13,695 
 Adjustment for: 
 Depreciation and amortisation         7,115             -     7,115        6,811             -     6,811 
 Impairment provision                      -           307       307            -            63        63 
 Charge for share-based 
  payments credited to 
  reserves                               528             -       528          425             -       425 
 Decrease/(increase) in 
  stocks                                 421             -       421        (584)             -     (584) 
 (Increase)/decrease in 
  debtors and prepayments            (1,978)             -   (1,978)        2,083             -     2,083 
 Increase/(decrease) in 
  creditors and accruals               2,131             -     2,131        1,548         (597)       951 
 Free trade loan discounts               113             -       113          136             -       136 
 Loss on sale of assets 
  (excluding property)                   215             -       215           79             -        79 
 Interest received                        14             -        14           13             -        13 
 Income tax paid                     (2,313)             -   (2,313)      (2,297)             -   (2,297) 
-------------------------------  -----------  ------------  --------  -----------  ------------  -------- 
 Net cash inflow/(outflow) 
  from operating activities           20,481         (188)    20,293       21,972         (597)    21,375 
-------------------------------  -----------  ------------  --------  -----------  ------------  -------- 
 

b Analysis of net debt

 
                                                                       Issue   Amortisation 
                                                         Repayment     costs       of issue 
                                              Cash    of long-term    of new          costs 
                                    2015      flow            loan      loan                      2016 
                                 GBP'000   GBP'000         GBP'000   GBP'000        GBP'000    GBP'000 
 ---------------------------   ---------  --------  --------------  --------  -------------  --------- 
 Cash                              6,793   (6,703)               -         -              -         90 
 Bank overdraft                        -     (727)               -         -              -      (727) 
----------------------------   ---------  --------  --------------  --------  -------------  --------- 
 Cash and cash equivalents         6,793   (7,430)               -         -              -      (637) 
 Debt due 
  within one 
  year                           (1,987)         -           2,000         -           (13)          - 
----------------------------   ---------  --------  --------------  --------  -------------  --------- 
                                   4,806   (7,430)           2,000         -           (13)      (637) 
 Debt due after 
  more than one year            (73,592)         -          14,000       313          (160)   (59,439) 
-----------------------------  ---------  --------  --------------  --------  -------------  --------- 
 Total                          (68,786)   (7,430)          16,000       313          (173)   (60,076) 
----------------------------   ---------  --------  --------------  --------  -------------  --------- 
 

7 Accounts

The financial information set out above does not constitute the Company's statutory accounts for the 52 weeks ended 25 June 2016 or 52 weeks ended 27 June 2015 but is derived from those accounts. Statutory accounts for 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered following the Company'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.

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR URSURNOAKUAR

(END) Dow Jones Newswires

September 21, 2016 02:00 ET (06:00 GMT)