MARKET REPORT UK’s oldest brewer toasts ale sales that rose 20pc
The UK’s oldest brewery toasted stellar full-year results, as growing demand for premium British ales helped it sidestep weakness in the wider pub and bar sector.
Shepherd Neame, which owns around 327 pubs in the UK and brews its own beers, saw sales of its Whitstable Bay ale jump by 20.5pc in the year ended June 24, while sales of its Spitfire brand grew by 2.2pc.
Flying in the face of struggling rivals like Greene King and Fuller Smith & Turner, the firm yesterday said it recorded sales growth of 8.1pc in the year, compared to industry growth of just 1.4pc.
This translated to underlying profit before tax of £15.3m, up from £14.2m in the previous year, and revenues of £156.2m, which were up from £139.9m.
earlier this year, the company lost its contract to brew and sell Japan’s best-selling beer Asahi in the UK, from February.
Despite Asahi making up 23pc of all its brewed beer, Shepherd Neame, which also owns brands like Bishops Finger and Orchard View, has decided to invest in British brews rather than buy another international licence.
It also acknowledged the headwinds mentioned by its peers in the pub and bar sector, such as Brexit uncertainty, rising staff costs and wet summer weather. Shares rose 2pc, or 25p, to 1255p.
Panmure Gordon slammed the brakes on car parts manufacturer
GKN by dismissing the argument that hurricanes and natural disasters boost car sales as nothing more than a load of claptrap.
GKN, which supplies more than 90pc of global car manufacturers, has risen 9.5pc over the last month as analysts have fallen over themselves to suggest that hurricanes in the US will eventually lead to an increase in sales.
The theory is that thousands of vehicles will need to be replaced having been destroyed in the storms.
But Panmure claims the argument, which is based on the fallout from hurricane Katrina in 2005, is flawed because car sales in fact fell by 18pc in the August when Katrina hit New Orleans.
‘hurricanes are bad for the overall economic output, which impacts overall demand for cars,’ the broker said in a ‘sell’ note. ‘Otherwise we would be praying for regular hurricanes.’ Shares fell 0.8pc, or 2.8p, to 345p.
The FTSE 100 finished flat despite being threatened by a jump in the value of sterling following an unexpected pick-up in retail sales over August. The index fell 0.05pc, or 3.30 points, to 7271.95. Domino’s Pizza soared higher, topping the FTSe 350 after announcing that it will begin a £15m share buyback programme. With such buybacks typically suggesting that a firm is in rude health, investors wanting a slice of the action pushed Domino’s shares up 6.5pc, or 18p, to 293.1p.
Cambian Group was weighed down in the first half of 2017 by fallout from the sale of its adult services division to American firm Cygnet health Care for £377m.
Despite reinstating its dividend, the firm, which now provides specialist education and behavioural health services for children, said that completing the sale has taken longer than first expected.
Costs related to restructuring the business following the sale led the firm to record a loss of £1.2m over the period. Shares fell 5.8pc, or 12.3p, to 200p.
Investors walked out on Reach4Entertainment, the firm that makes theatre show posters, after a 14.5pc drop in revenues to £41.9m in the first half of the year and an 8.7pc drop in profit to £10.5m. The firm sank 12.7pc, or 0.18p, to 1.2p.