Festive sales boost for Greene King

SUFFOLK-based pubs and brewing group Greene King sounded a note of cautious optimism today as it revealed that sales had remained relatively resilient over Christmas and the New Year.

SUFFOLK-based pubs and brewing group Greene King sounded a note of cautious optimism today as it revealed that sales had remained relatively resilient over Christmas and the New Year.

In a trading update, the Bury St Edmunds company said like-for-like sales within its Greene King Retail division - principally its managed house estate in England - were 2.4% up over the last eight weeks, helping to limit the overall decline for the first 38 weeks of its financial year to just 1.1%.

Greene King said the performance involved “a fine balance between delivering better value to our customers and withstanding the continued cost pressures that the business is having to absorb”.

Key factors in the improved recent like-for-like sales performance included strong Christmas bookings, further improvement within the group's Hungry Horse pub restaurant chain and targeted investment in sports-led satellite TV.


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However, Greene King said that the underlying profit performance of its tenanted business, Pub Partners, had softened in the last two months as anticipated.

Underlying like-for-like profits for the year-to-date are now down 5.3%, driven mainly by a decline in beer volumes and increased levels of licensee support.

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“Our re-organisation of the division into core and independent pubs will play an important role in adapting our business to face the most extreme trading conditions we and our licensees have seen,” it added.

Greene King said that its Brewing Company own-brewed volumes were down 1.5% after 38 weeks, with the off-trade continuing to out-perform the on-trade.

And Belhaven, the group's integrated brewing and pubs business in Scotland, continued to perform well, with year-to-date managed like-for-like sales 2.4% up and beer volumes well ahead of the Scottish market, it added.

Greene King said it was continuing to reduce its net debt position. “We are successfully disposing of non-core assets, and in the 38 weeks to date, 90 disposals of properties and excess land have been completed, achieving proceeds, ahead of net book value, of �35million,” it said. “Although the rate of disposal is likely to slow, we still anticipate further disposals being made throughout 2009.”

Looking ahead, the group added: “The anticipated post-New Year slowdown has not, as yet, taken place, but we remain very cautious as to trading prospects for 2009, and we anticipate that the outlook for the rest of the year will remain very challenging.

“However, Greene King is well placed to cope with a prolonged consumer downturn, particularly given the steps being taken to further strengthen each element of our business, our sound balance sheet, and the prudent and firm approach taken to cost control, cash generation and debt repayment. Overall, our trading and financial position remains in line with our expectations.”

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