Sparks - Shepherd Neame

Shepherd Neame has reported an encouraging trading update for FY26, indicating that profit will be in line with expectations. The company has enjoyed solid trading across the year, notably against a tough comparative at the end of the year and when taking into account the challenging consumer backdrop.

The main headlines are that like-for-like (l-f-l) retail sales increased by 3.8% and l-f-l tenanted pub income grew by 2.7% in the year.  The latter represents a good improvement from the 1% delivered in FY25. The full-year figures represent a modest slowdown versus the respective 4.5% and 3.1% growth rates reported at H126, and versus the trading update provided at that time when l-f-l retail growth was 4.4% (first 37 weeks) and l-f-l tenanted pub income growth was 3.0% (first 35 weeks). However, we would note the company had a tough comparative from the end of FY25, so this represents a good performance.

Overall beer volumes continue to decline, albeit at a slower rate of 9.6% in FY26 versus FY25’s 11.8%. However, the company is enjoying good volume growth in its managed estate (3.5% total growth) and tenanted estate (5.1% growth).

The recent good weather has supported trading into the new financial year with l-f-l retail sales growth of 4.3% in the first three weeks of FY27.

There was a net decline of six pubs in the estate during the year to 280 by the year end, with an increase in tenanted pubs more than offset by fewer managed pubs.

The company has also announced some management changes with Jonathan Neame taking the role of executive chairman, and Mark Rider, the current CFO, taking the newly created role of managing director from the date of the AGM at the end of October 2026. The company expects to appoint a new finance director by the end of FY27, until which time Mark will perform both roles.