Shepherd Neame (AQSE:SHEP) announced it will invest £15 million over three years to build a modern, smaller brewery on its historic site in Faversham, exiting large third-party contract brewing to focus solely on its own beer brands.
Aquis-listed Shepherd Neame, Britain's oldest brewer, announced the strategy update ahead of its AGM.
The new facility will be built within the existing Bottling Hall, which will close in mid-2027 for conversion, and will continue to draw water from the brewery's historic artesian well.
The build will take two years from commencement, targeting completion by the end of 2029, with brewing continuing at the current location in the meantime.
The company's exclusive licence to brew and distribute Singha Lager, currently worth £10.3 million in revenue, will end in April 2027 as part of the shift away from third-party contracts; flagship brands Spitfire, Bishops Finger and Whitstable Bay will continue from the new plant.
The investment is expected to be self-funded through the sale of non-core property, as Shepherd Neame reduces its town centre footprint to a retained "Heritage Core" site, for which it plans a 10-year development vision including offices, retail, a pub, events space and a new public square.
"This plan is a great opportunity to modernise and evolve our operations, and to create a unique brand home, with brewing at its heart," said chief executive Jonathan Neame, adding that the self-funded brewery "will be adapted to the needs of tomorrow, and will be efficient and cost-effective."
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The company said its review of strategy elsewhere in the Brewing and Brands division, flagged at its full-year results, is "progressing well" and further details will follow in due course; the division's underlying operating profit had collapsed to £0.1 million from £1 million in the last financial year on rising logistics costs.
Alongside the strategy update, Shepherd Neame reported continued trading momentum, with like-for-like retail sales up 6.4% in the 17 weeks to 24 October and tenanted like-for-like income up 1.1% to 26 September, while total beer volume fell 0.6% and own beer volume dropped 2.2% over the 17-week period.
The company said it does not anticipate any changes to market expectations for the 2027 financial year.