Greene King beer sales dip as firm prepares for Chinese takeover
PUBLISHED: 09:03 06 September 2019 | UPDATED: 09:03 06 September 2019
Pubs and brewing giant Greene King has seen a dip in beer sales as shareholders gather for the firm's annual general meeting following a £2.7bn sale deal with a property group owned by Hong Kong's richest family.
The board is supporting the takeover offer from CKA, which is chaired by Victor Li, son of Hong Kong's richest man, through newly formed Cayman Islands subsidiary CK Bidco.
The Bury St Edmunds-based firm saw its like-for-like sales fall in the first quarter, as beer sales struggled to keep up with some strong comparative figures last year, which had been helped along by the men's football World Cup and good weather.
MORE - Greene King name set to live on in Bury St Edmunds despite sale plans
The company said it was "on track" with its disposal programme and expected to dispose of 85 to 95 pubs this year, generating disposal proceeds of around £45 to £55m, which it will use to fund the opening of eight new pubs.
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Like-for-like net income in Pub Partners was down 4.2% during the first 16 weeks of this year, while in Brewing & Brands, total beer volumes plunged 6.5% for the first 18 weeks and own-brewed volumes fell by 7.9%.
But Greene King said like-for-like sales had improved more recently, rising 1.5% over the past seven weeks compared to the same period last year.
It added that the business is on track with a cost reduction programme and expects to limit net inflation to between £10m and £20m.
The Suffolk-based business is the UK's biggest pub owner, with around 2,700 pubs, restaurants and hotels across the country. It employs about 38,000 people across its main trading divisions - Pub Company, Pub Partners and Brewing & Brands
The takeover deal secured in August offered a 51% premium on the value of shares in the brewer, from trading on the day before the announcement.
The move came just seven months after fellow UK pub group Fuller's sold its brewing business to Japanese firm Asahi.