Yahoo Finance Shepherd Neame boss predicts bumper ‘staycation summer’ as brewer reports Covid loss
People returning to The Rose in June in Margate last week
(Shepherd Neame)The chief executive of Britain's oldest brewer Shepherd Neame hailed a "really encouraging" first trading week and predicted a bumper "staycation summer" to come as the group reported a Covid-era loss.
The brewer, which and operates 319 pubs and hotels across London and the South East, opened 200 sites on April 12.
Boss Jonathan Neame told the Standard the nature of its coastal, rural, garden and accommodation-led estate puts it "in a good position compared to town centres" for a quick recovery.
He said: "The speed of recovery at the moment, after just eight days, is faster than we saw in July last year, and that suggests to me that people feel more confident - probably because the vaccine programs are being so successful.
"We are already seeing a lot of bookings for indoor dining, and also for accommodation. Throughout the summer a lot of our hotels are either fully booked or nearly booked, so I do think it's going to be a very strong staycation summer as we have all hoped."
The brewer said on Wednesday that it crashed to a £7.2 million statutory pre-tax loss for the 26 weeks to December 26, compared to a £5.4 million profit for the same period a year earlier.
Neame said the group's underlying monthly cash burn of £1.5 million - £2 million while closed had not been "as bad as we feared", and that executives' concentration now is "all about restoring the financial health of the company".
He highlighted the group's "very good support from our banks and sufficient liquidity" at least until September 2022. The company said it has £36 million in headroom, with net debt at £96.5 million by March 27, up from £84.4 million in late June last year.
Neame said: "Our whole ambition is to get back to where we were, and then we will be building on our expansion plans."
The sector veteran also said that he is now "very confident London will recover" in a way he was not a few months ago - although he warned it "may take a year or two" and that the City "may take a bit longer" than areas such as the West End, which are seeing a fast pace of recovery.
He said: "If the first lockdown demonstrated the benefits of Zoom, the last lockdown has demonstrated the restrictions of zoom, and I think there's a real appetite for face-to-face engagement. I think young people in particular are missing the office environment, and of course London has so much more to offer.
"The West End has already bounced back much quicker than in July last year, so I think that's another reason to be optimistic."
Analyst Douglas Jack at Peel Hunt noted that the summer’s “strong staycations market that will be served by fewer outlets” and upgraded forecasts on Wednesday morning.
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