Sheps banks on a ‘staycation summer’
Pub chain giant and brewer Shepherd Neame says it hopes to be back in profit by 2022 after the impact of the Covid lockdowns blew a huge hole in its bank balance.
For the six months ending December 26, 2020, the Faversham-based firm reported a statutory loss of £7.2million before tax. A year earlier, the same period had generated a profit of £5.4m.
But chief executive Jonathan Neame says he hopes a staycation summer will get the company back into the black. He also hopes by midsummer the firm will be able to start recruiting staff once again after shedding 20% of its 1,750 staff - half through redundancy, the other half natural wastage.
The CEO said: “Everyone’s goal posts have shifted in the last year, so it’s all about debt and cash management rather than profit per se.
“Our cash burn has been slightly lower than expected at £1.5-2m a month and that’s partly because our brewery has done very well during the period with sales to export and grocery. And partly because there was another round of grants which has helped us in the early part of this year. “The banks have supported us - and that’s critical which means we have ample liquidity as a business through to September 2022 and I think that time period is long enough to recover and return to profitability. That’s assuming we don’t go backwards again.
“But if we get the staycation summer that we hope, and the forward bookings for our hotels are very strong at the moment, then over that time period I think we can return to profit. Maybe not the levels we were at before, but by the end of 2023, I would hope we would have recovered all the ground that we have lost and some.”