ANNOUNCEMENT OF PRELIMINARY RESULTS FOR THE YEAR ENDED 27 June 2009

Shepherd Neame, the Kent-based brewer and pub operator, today announces results for the 52 weeks ended 27 June 2009.

Financial performance:

• Turnover £109.5m (2008: £101.7m)
• Operating profit before exceptionals £9.5m (2008: £12.6m)
• Profit before tax £6.9m (2008: £8.7m)
• Earnings per share 44.7p (2008: 49.3p)
• Final dividend per £1 share 17.9p; total dividend per £1 share 22.45p (2008: 22.45p)

Operational highlights:

• Strong key sales indicators
  • turnover up 7.6%
  • total beer volume up 6.3%
  • like-for-like managed sales up 1.6% and margins maintained (with resilient London performance, up 2.7%)
  • like-for-like EBITDA per tenanted pub down 3.3%
    
    
• Operating profit before exceptionals down due to high short term or non-recurring items
  • rise in raw material costs
  • bottling capacity exceeded and temporary need to outsource production
  • market pressure felt most in smaller tenancies
  • high non-recurring overheads

• Significant achievements in 2008/09
  • 15 high quality and high turnover pubs acquired
  • new bottling line installed
  • SAP implementation complete

• Performance encouraging in 13 weeks to 26 September 2009  
  • total beer volume up 10.1%
  • like-for-like managed sales up 4.0% (with food up 6.3%)
  • costs reducing in line with expectations
  • 13 properties sold or under contract for £3.4m

Miles Templeman, Chairman, commented:

“This has been a year of strong sales and significant achievement, but we have incurred high short term costs which have resulted in lower profit. However, we expect operating margin to improve in 2009/10.

Our strategy is to build a strong integrated beer and pub business. The strength of our balance sheet has enabled us to invest through the downturn which has presented an excellent opportunity to acquire 15 high quality pubs at attractive prices. We have also completed the modernisation programme of our production and distribution facilities.

Although the general short term economic outlook is uncertain we have made an encouraging start to the new year with strong beer volumes and like for like sales growth. We remain confident in the quality of our pub estate, the strength of our brands, our overall market position and our future prospects.”

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