Britain's oldest brewer Shepherd Neame has rebounded into profit after two years of being hit hard by enforced closures due to the pandemic.

But the Faversham business it warned "current economic uncertainties" and "inflationary pressures" are likely to hit its margins in the months ahead.

The firm announced it had delivered a pre-tax profit of £5.4million for the six months leading up to December 25, 2021. That compares to a loss of £7.2m over the same period the year before.

Revenues rose to pre-pandemic levels of £78.7m - up 54.5%.

Jonathan Neame, CEO of Shepherd Neame, said: "I am pleased to report a strong rebound in the first half of the year despite ongoing restrictions and operational challenges during the period. We are now back to pre-pandemic trading levels, have strong cash flow and have returned to profitability.

"Our business is in good shape and has traded well following the lifting of all restrictions. However, the current economic uncertainties are putting inflationary pressure on the sector which will impact margins."

The firm operates more than 300 pubs across Kent and the South East, as well as brewing a range of beers,

It added that the return of workers to offices had seen its London pubs - which were hit hard by the work-from-home directives - return to near pre-pandemic levels.

And it said turnover of licensees was down due to the "high levels of support" it had offered them during the crisis.

Its financial success meant a first dividend payout to shareholders since October 2019.

It had also reduced its net debt to £82.4m from £92.5m the year before and paid all remaining VAT liabilities to HMRC by the end of January and all deferred rent payments.

Jonathan Neame added: "We have a robust and resilient business and a strong platform from which to build. We move forward with confidence and are pleased that we can now resume investment across our business at pre-pandemic levels.

"We are looking to the future with cautious optimism and are excited about delivering an uninterrupted Easter and summer for the first time in three years.”