Uncertainty over the stability of the UK economy remains a concern, but Kent-based brewer Shepherd Neame said the strength of its brands should help it continue its improvement next year.
The company, which not only brews beer brands such as Spitfire but also manages a portfolio of pubs, reported the 27th consecutive year of profit growth with figures of £8.4 million (€13.4m), up 2.1 per cent, on sales up a healthy 10.5 per cent to £78.8 million.
"Although the UK economic outlook is uncertain, we believe that we are in an excellent position to grow our brands and become the leading specialist brewer in the UK," said managing director Jonathan Neame.
The strength of Spitfire was clear from the 29.2 per cent rise in volumes recorded during the half, which contributed to a 6.1 per cent hike in overall beer volumes. Shepherd Neame also has the exclusive rights to brew Holsten Export in the UK, and the strong premium lager brand has excellent consumer recognition and good marketing support throughout the country.
In addition, the brewer has acquired the UK trademark of Hurlimann Sternbrau and rebranded it with a new font and chilled dispense to attract younger customers. The Indian lager brand Kingfisher (licensed to Shepherd Neame from United Breweries) has continued to grow in an increasingly competitive marketplace and the contract to brew the beer was extended during the year. The portfolio is completed with the Dutch beer Oranjeboom Pilsener, brewed under licence from Interbrew.
The company also exported its beer to 15 countries last year, including France, Sweden, Norway and Finland. Sales in Scandinavia grew by 5.4 per cent and overall contribution to profit grew by 25 per cent.
The brewer also operates a wine division, Todd's the Wine Company, which grew by 9.4 per cent, and has developed a private-label range of products including Eaton Blue Gin and Ikon Vodka.
But drinks brands were not the only drivers of growth. Turnover at the group's managed pubs was up 21.4 per cent, while profits rose 23 per cent and like-for-like sales were some 8.7 per cent higher. The estate now comprises 69 pubs, with several of the larger outlets showing excellent results, and many more outlets, including several focused primarily on food, are planned for the coming year.
The tenanted estate of 294 pubs which remains the core of the Shepherd Neame business, and the company said it was in excellent shape. Seven new high quality tenancies were added during the year, while 10 poor performing outlets were disposed of.
"We can look forward with great confidence as we continue to build a highly professional team in brewing, property management and pub retailing in a region that is one of the strongest growth areas in the UK," commented Neame. "We have set ourselves ambitious targets and believe we are making excellent progress towards achieving them."