Bury St Edmunds: Greene King pays �53.1m for Realpubs

PUBS and brewing group Greene King today revealed another acquisition as it reported continued “strong trading momentum”.

The Bury St Edmunds-based company announced a �53.1million deal for Realpubs, which operates 14 “premium” pubs in London.

Greene King said all but one of the Realpubs sites were freehold, and their offer was “well-developed and highly successsful”, targeting the pub dining market. Food currently accounted for 33% of sales, and was growing strongly, with around half of all sales being driven by customers visiting the pubs to eat.

They were expected to achieve average weekly turnover of �24,500 during 2011m, with average headline earnings of �450,000 per site, it added.

Greene King, which said the acquisition was being funded out of its existing bank facility, announced the deal in a final trading update ahead of its annual results for the 51 weeks to April 24.

It said like-for-like sales at its retail pubs business were 4.7% up, implying 8.2% growth since the end of December’s cold snap.

“Good weather across the UK has undoubtedly helped trading in the last few weeks, but our continued strong growth is driven by our focus on strategically important categories such as food and the consistent delivery of our industry-leading customer value, service and quality across the business,” said Greene King.

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The leased and tenanted pubs business remained in growth after 48 weeks, with like-for-like earnings 0.8% ahead and average earnings per pub 1.9% up.

And the brewing business continued to outperform the overall market, with total volumes up 2.0%. Own-brewed volumes were down 2.5%, although since the end of the cold snap the figure had been in line with the previous year.

Rooney Anand, Greene King’s chief executive, said: “Drven by our clear and consistent strategy of delivering excellent customer value, service and quality, trading at Greene King has been strong and as a result, we remain confident for the outcome for the year.

“We continue to supplement strong underlying organic growth with targeted, value-creating acquisitions to accelerate our strategic aim of growing our retail business to around 1,100 pubs and building the best retail estate in the UK.

“We are excited by today’s acquisition as it fits well with our strategy, by further strengthening our London presence and accelerating the development of our premium pub offer.

“The addition of Realpubs takes the total number of Greene King sites within the M25 to 217 and positions us strongly ahead of, during and after the Olympics in London in 2012, when London and its pubs and restaurants will be visited by tourists from across the world.”