Shepherd Neame remains “extremely resilient” as it enters into lockdown, and will emerge in a “position of strength”, the group reported in a financial update.

The brewer reported its pubs have “outperformed the market”, with managed like-for-like sales at 66% of last year’s levels and managed like-for-like sales for open sites down 13.4%.

Despite the challenges of a new lockdown, Shepherd Name described its business as “resilient and well positioned for growth” once normal trading conditions resume.

However the update comes as Shepherd Neame announced it has cut 10% of its workforce as it prepares for the month-long lockdown.

In a message to customers, CEO Jonathan Neame said the pubco will be requesting more than 90% of its workforce step down from their current roles on a temporary basis.

In a trading update for the 18 weeks to 31 October 2020, the Kent company, said own brand beer and cider volumes were at 98% of the prior year level. Total own beer volumes at 92% of the prior year level

Net debt “continues to hold steady”, £84.8m at 31 October 2020 with the tax liabilities that had been deferred reduced to £4.7m with a further £1.1m of general deferrals.

The group traded well up to the outbreak of coronavirus, with the first 8 month period of the financial year to 29 February 2020 saw turnover up +4.6% and underlying profit before tax up +6.1%.

The business warned the new lockdown from 5 November would be “extremely disruptive and adversely impact performance”, with uncertainty over the Christmas trading period.

Overall, turnover for the year decreased to £123.6m (2019: £145.8m) demonstrating the impact of three months’ closure

Underlying operating profit was £0.9m (2019: £15.3m) and underlying loss before tax was £2.9m (2019: profit £11.4m). Statutory loss before tax was £12.1m (2019: profit £3.5m)

Its core strategy, as a brewer and pub retailer within our heartland of Kent, London and the South East, remains unchanged by the virus.

The balance of business between managed, tenanted and brewing, between wet, dry and accommodation, and between city, suburban, community and destination pubs has proved to be “extremely resilient”, the company said.

Jonathan Neame, CEO, commented: “This has been the most challenging period any of us in the hospitality industry have ever faced. I am incredibly proud of how everyone across the business has reacted, and the ingenuity and team spirit shown by our licensees and team members during this time has been inspiring.

“Trading during the summer months was encouraging, highlighting the strength of our offer and people’s undiminished desire to go out and socialise in a safe environment with family and friends.

“We have worked hard to drive positive cash flow in the new financial year and have sufficient liquidity for the foreseeable future. We welcome the ongoing support from the Chancellor, but the sector faces a very tough winter as we return to lockdown with fresh uncertainties.

“Shepherd Neame has weathered many crises in its long history and I am determined that we emerge from this crisis in a position of strength, ready to seize the opportunities that lie ahead.’’