1

PRELIMINARY RESULTS FOR THE 52 WEEKS

ENDED 25 JUNE 2016

2

MILES TEMPLEMAN

CHAIRMAN

2016: STRONG UNDERLYING GROWTH

3

First full set of results under FRS102

All comparatives have been restated

Strong underlying growth

Impressive growth in managed pub profits

Tenanted pubs and Brewing & Brands deliver strong cash generation

Strong cash flows, disposal proceeds & refinancing key

features of year

In strong position to seek further acquisition opportunities

New non-executives appointed to the Board

A YEAR OF FURTHER GROWTH IN NET ASSETS AND DIVIDEND

PER SHARE

4

Proposed final dividend of 22.05p taking total to 27.50p

This represents underlying cover of 2.0 times. We will

continue to target cover at or above this level

Net assets per share* in 2015 and 2016 benefits from asset

revaluation after FRS102 transition

*Net assets at Balance Sheet date divided by the number of shares in issue being 14,857,500 50p shares.

2012 to 2014 reported under previous UK GAAP

BOARD CHANGES

5

Richard Oldfield appointed Chairman of Audit Committee

Bill Brett appointed Chairman of Remuneration Committee

Hilary Riva OBE

Joined April 2016

Richard Oldfield DL

Joined June 2016

Oliver Barnes

Retired June 2016

James Leigh-Pemberton

Retired September 2016

6

MARK RIDER

FINANCE & IT DIRECTOR

FRS102: TIMELINE OF EVENTS

28 June 2014

Previously

reported under old UK GAAP

Date of transition

Balance

Sheet restated

under FRS102

52 weeks to 27 June 2015

Previously

reported under old UK GAAP

Restated under FRS102

Form the

comparatives for the 2016

annual report

52 weeks to

25 June 2016

First annual report under

FRS102

7

Equity shareholders funds as reported 128.8

28 June 2014 £m

Revaluation of licensed freehold property 68.3

Revaluation of investment property 1.9

Customer loans and bank loans (0.2)

174.5

Short term compensated absences

Interest rate swaps

(0.2)

Deferred tax

(15.5)

(7.2)

FRS102: KEY IMPACTS ON THE 2014 TRANSITION BALANCE SHEET

Restated equity shareholder funds

Operating leases (1.4)

8

28 June 2014

Previously

reported under old UK GAAP

Date of transition

Balance

Sheet restated

under FRS102

52 weeks to 27 June 2015

Previously reported profit before tax 9.4

Additional depreciation on revalued properties (0.1)

Differences to impairment and profit on

disposal of revalued properties

13.7

Fair value gain on investment property

Operating leases

0.5

Customer loans and bank loans

4.1

FRS102: RESTATED P&L FOR 2015

£m

(0.2)

0.1

Short term compensated absences (0.1)

Restated profit before tax

9

52 weeks to 27 June 2015

Previously reported under old UK GAAP

Restated

under FRS102

Form the comparatives for the 2016

annual report

PERFORMANCE HIGHLIGHTS

10

Turnover 139.9 138.2

2016

£m

2015

£m %

Operating Profit 14.2 13.8 3.5

Net Finance Costs (3.9) (4.5)

Profit before Tax 10.3

Statutory Profit Before Tax

4.1 4.4

11.9

Tax Rate (%)

14.4 13.7

Earnings Per Share (pence)

21.8 22.9

Full Year Dividend per share (pence)

54.7 48.7

9.3

Total Items excluded from underlying results

26.7 27.5

12.3

3.0

Underlying results

Reconciliation to statutory profit

10.7

1.2

4.7

DIVISIONAL PERFORMANCE: TENANTED PUBS

11

* LFL earnings before interest, tax, depreciation, amortisation and rent payable

LFL EBITDAR* growth +2.7% +2.4%

2016 2015 %

Turnover (£m) 33.5 33.4

Divisional operating profit (£m) 12.6 12.8 (1.2)

0.3

Underlying results

Solid turnover performance on 13 fewer outlets

Underlying profit reflects

Good LFL EBITDAR performance

Fewer pubs

Increase in property and repair spend of £0.3m as we invest for long term

DIVISIONAL PERFORMANCE: MANAGED PUBS

12

LFL sales growth +4.4% +6.1%

2016 2015 %

Turnover (£m) 48.1 43.8

Divisional operating profit (£m) 7.6 6.7 13.7

9.8

Underlying results

Strong growth in Managed pub turnover

Consistent LFL growth

2 additional sites

Operating profit reflects

Turnover growth

Increasing mix of food and accommodation

National Living Wage cost of £0.1m in 2016. Estimate of

Living Wage and Apprenticeship Levy impact £1.1m by 2020

DIVISIONAL PERFORMANCE: BREWING & BRANDS

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Own brewed volume ex contract growth +0.3% +0.1%

2016 2015 %

Total own brewed volume decline (6.2%) (8.4%)

Turnover (£m) 57.3 59.7 (4.1%)

Underlying results

Divisional operating profit (£m) 1.5 1.8 (18.9%)

Turnover and volume decline in total own brewed beer

reflects end of Kingfisher contract

Profit decline follows Reduction in volume Increase in water recovery costs of £0.3m

Robust cash generation

ITEMS EXCLUDED FROM UNDERLYING RESULTS

14

FRS102 and FCA transitions - (0.2)

(0.1) (0.5)

Property profits

Tax on items above

4.3 0.4

(0.5) (0.6)

2016

£m

2015

£m

Total operating exceptional costs

Property impairment (0.3)

(0.1)

Investment property fair value movements 0.3 4.1

Total before tax 4.1 4.4

Impact of reduced tax rate on deferred tax 0.7 -

Total items after tax 4.3 3.8

Items excluded from underlying results

CASH FLOW: INCREASED INTERNALLY GENERATED FREE CASH

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(4.4)

Underlying EBITDA* 21.7 20.8

Cash flow from operations 20.3 21.4

Interest and loan fees

(4.3)

Disposal proceeds 3.2

Internally Generated Free Cash 23.7 15.9

Core Capex (9.7)

Acquisitions (4.7) (3.4)

(4.2)

(10.4)

(7.4) Net cash(outflow)/inflow 0.8

11.9

(4.3)

Working Capital & other operating cash flows

Cash outflow from exceptional items

1.1

(0.2)

3.5

(0.6)

2016

£m

2015

£m

Dividends and purchase of own shares

Repayment of debt (16.0) (2.0)

• Underlying profit before tax pre net finance costs, depreciation, amortisation, profit and loss

on sale of fixed assets excluding property and free trade loan discounts

Tax (2.3) (2.3)

BALANCE SHEET: REDUCTION IN DEBT LEVELS AND LEVERAGE

16

183.9 179.8

2.8

(68.8)

Fixed Assets 280.2

280.0

Other Assets and Liabilities (36.2) (31.4)

Net Debt

Shareholders Funds

Net Debt : Underlying EBITDA 3.3

Balance Sheet Gearing 33% 38%

2016

£m

2015

£m

Net assets per share £12.38 £12.10

(60.1)

Fixed assets reflects revaluation on transition to FRS102

£60m term loan to 2026 remains in place

Revolving credit facility of £20m to 2020 with further uncommitted

option to extend by £10m

2016: STRONG FINANCIAL PERFORMANCE

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Growth in underlying operating profit and margin

following increased mix of Managed pubs

Reduced finance costs from lower net debt and lower

cost facility

Revaluation of fixed assets on transition to FRS102 provides

uplift in net assets per share

Increased internally generated free cash strengthens

balance sheet for further development

18

JONATHAN NEAME

CHIEF EXECUTIVE

MARKET CONTEXT

19

UK beer market in growth of 1.2%

with shift towards premium and

craft products, innovation and flavour

Mixed trading conditions:

Strong Christmas and Rugby World Cup

Long spells of unseasonable

weather

Increased economic activity in

Kent heartland with momentum in house building

20

A NEW BRAND IDENTITY FOR SHEPHERD NEAME

OUR STRATEGIC OBJECTIVES

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TO DRIVE

FOOTFALL TO

OUR PUBS

TO CREATE

DEMAND AND

BUILD

AWARENESS FOR

OUR BRANDS

TO ATTRACT,

RETAIN AND

DEVELOP THE

BEST PEOPLE

TO DEVELOP OUR

OFFER TO

ENHANCE THE

CUSTOMER

EXPERIENCE

TO DRIVE

FOOTFALL TO

OUR PUBS

TO DEVELOP OUR

OFFER TO

ENHANCE THE

CUSTOMER

EXPERIENCE

OUR STRATEGIC

OBJECTIVES

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TO DRIVE FOOTFALL TO OUR OUR PUBS

TO DRIVE

FOOTFALL TO

OUR PUBS

We aim to drive footfall by designing

and developing unique pubs and hotels

with a ‘wow’ factor

ACTIVE PROPERTY MANAGEMENT

23

Tenanted

Managed

Total

338

2015 Acquisitions Disposals 2016

Since 2011 we have acquired 15 pubs and disposed of 46 that no longer

fit our strategy

2016 pub ownership profile: 87% freehold

Disposal of land at Queen Court, outside Faversham

280 1

2 52

3

(12) 267

-

328 (13)

Investment properties

Transfers

To Investment

Properties

6 -

(2)

-

2

-

(1)

54

7

DRIVING FOOTFALL TO OUR PUBS: CONSISTENT LFL GROWTH

Average EBITDAR growth per Managed pub since 2011: +42.2%

Average EBITDAR growth per Tenanted pub since 2011: +25.6% 24

DRIVING FOOTFALL TO OUR PUBS: ACQUISITION OF NEW PUBS

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Coastguard, St Margarets Bay

Coastguard, St Margarets Bay

The Minnis Bay Bar & Restaurant, Birchington

The Anchor, Yalding

DRIVING FOOTFALL TO OUR PUBS:

FURTHER ACQUISITION OF 8 HIGH QUALITY PUBS SINCE YEAR END

26

The Farmhouse, West Malling

The Greyhound, Keston The Kings Head, Guildford

Sussex Oak, Warnham

DRIVING FOOTFALL TO OUR PUBS:

MAJOR INVESTMENT IN SHIP AND TRADES AND ROYAL ALBION

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Ship & Trades, Chatham Maritime

Royal Albion, Broadstairs

Capex investment in existing estate £7.3m

(2015: £6.5m)

Repairs & decoration £2.2m (2015: £2.1m)

DRIVING FOOTFALL TO OUR PUBS:

CONSISTENT INVESTMENT IN TENANTED ESTATE

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William The Conqueror, Rye Harbour

The Monument, Canterbury

The Cricketers, Canterbury

The Gate Inn, Marshside

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TO DRIVE FOOTFALL TO OUR OUR PUBS

TO DEVELOP OUR

OFFER TO ENHANCE THE

CUSTOMER EXPERIENCE

We aim to enhance the customer

experience in our pubs by delivering

great fresh food, providing

accommodation of character and

offering an interesting range of products

DEVELOPING OUR OFFER TO ENHANCE THE CUSTOMER

EXPERIENCE: GREAT FRESH FOOD

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Continued growth of food turnover

LFL sales up +4.2%

Footfall up +7.7%

Spend per head up +3.9% to £11.96

Team and resources strengthened

through acquisition of UES Ltd

Pilot at Ship and Trades to enable

improved booking and table

management

Our pubs are recognised for

excellence including Compasses,

Crundale and Sportsman, Seasalter

DEVELOPING OUR OFFER TO ENHANCE THE CUSTOMER

EXPERIENCE: ACCOMMODATION OF CHARACTER

31

Increase in RevPAR* of 8.6% to £63 (2015: £58). Occupancy

remains at a record high of 78%

During the year 39 bedrooms refurbished taking total bedroom

stock in Managed estate to 283

Further development in 2017 at Ostrich, Colnbrook delivering 11

new bedrooms

The Royal Hotel, Deal

Ship & Trades, Chatham Maritime

*Revenue Per Available Room

32

DEVELOPING OUR OFFER TO ENHANCE THE CUSTOMER EXPERIENCE: CONSISTENT STRONG TRADING PERFORMANCE

33

TO ATTRACT,

RETAIN AND

DEVELOP THE

BEST PEOPLE

We aim to attract, retain and develop the

best people by understanding the potential

in everyone, inspiring them to achieve their

goals and building the loyalty and

engagement of our licensees, through the

professionalism of the support we provide

ATTRACTING, RETAINING AND DEVELOPING THE BEST PEOPLE

34

In Managed estate we

have appointed 5 Head

Chefs to act as mentors

Tenanted retention rising.

Estate fully let at year end

and new licensees

needed for less than 6% of estate

Strong performance in

independent pub survey of licensees

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TO DRIVE FOOTFALL TO OUR OUR PUBS

TO CREATE

DEMAND AND BUILD

AWARENESS FOR

OUR BRANDS

We aim to create demand and

build awareness of our brands by

developing a range of distinctive

beers, instilling a passion for

quality and having great

engagement with our customers

CREATING DEMAND AND BUILDING AWARENESS

FOR OUR BRANDS: INVESTING IN QUALITY

36

Modernisation of Brew

House with replacement of

100 year old mash tuns

Further investment in fabric

of historic brewery

buildings and brewery

plant to drive quality

Focus is on own beer

growth. Continuing

discussions with Asahi

Seven awards won since

year end for brewing and

bottling quality

CREATING DEMAND AND BUILDING AWARENESS FOR OUR

BRANDS: OWN BEER VOLUMES EX CONTRACT UP +0.3%

37

SUMMARY AND CURRENT TRADING

38

Another excellent year of growth in

Managed pubs

Strong financial performance and balance sheet with opportunities to

drive further growth in business

Positive start to new financial year LFL growth in Managed pubs and

hotels +8.2% to 3 September 2016

LFL growth in Tenanted pubs

+2.2% to 27 August 2016 Own beer volumes excluding

contract growth of +1.2% to

3 September 2016

STRATEGIC POSITION

39

Focus in recent years to improve

quality of pub estate and

modernise brand portfolio

We have created a stronger

business with sustainable cash

flows, skills and ambition for further growth

New brand identity presents

exciting opportunities to

strengthen engagement with

consumers

40

QUESTIONS