Improved underlying sales and profits for Bury St Edmunds-based Greene King
- Credit: Archant
Pubs and brewing group Greene King today reported an increase in underlying first half sales and profits, despite a “challenging” trading environment.
The Bury St Edmunds-based company, which is poised for further expansion having agreed a £774m deal to buy the Spirit Pub Company, which would increase the size of its pub estate by more than 1,200 to above the 3,000 mark, said total revenue for the 24 weeks to October 19 grew by 3.3% compared with the same period a year ago, from £595.4million to £614.9m.
Overall, operating profit dipped by 3.1%, from £127.2m to £123.3m, and profit before tax and exceptional items fell 3.5% from £85.6m to £82.6m. However, statutory pre-tax profit, including one-off factors, grew by 9.8%, from £65.6m to £72.0m, And on an underlying basis, excluding non-core pubs which have been sold since last year’s mid-way stage, revenue was 5.3% up, at £613.1m against £582.2m, operating profit 1.8% higher, at £122.2m compared with £120.0m, and pre-tax profit was 3.0% ahead, at £81.6m against £79.2m.
Greene King said like-for-like sales in its key retail division, covering pubs and restaurants under direct management, were 0.8% up compared with last year’s first half.
It also said that progress had continiued into the second half, with the like-for-like figure still 0.8% higher after 30 weeks of the current year, including a 1.5% increase in the last 12 weeks. Bookings for Christmas across the retail division were 7.2% up on last year, it added.
Like-for-like net income from Pub Partners, Greene King’s tenanted pubs division, were 3.7% higher, with earnings per site 13.8% higher, and own-brewed volume from its Brewing & Brands division, including its brewing operation in Bury, were 5.9% up.
The group said that it had added 11 sites to its retail estate during the first half, taking the total to 1,040, while its Pub Partners estate now numbers 864 properties.
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Rooney Anand, Greene King chief executive, said: “We have delivered record sales and strong returns against a challenging backdrop, reflecting the inherent strength of our business model and our proven strategy.
“Retail, our largest business, delivered profit growth, while we maintained momentum in Pub Partners and Brewing & Brands. As a result, we improved our ROCE (return on capital employed), lowered our leverage and increased the dividend.
“In addition, we have made further, significant strategic progress by increasing our retail estate and disposing of non-core tenanted pubs to enhance further the quality of our estate, and making a recommended offer for Spirit Pub Company.
“With real incomes struggling to grow, customers remain cautious about spending on eating and drinking out. As a result, we will continue to tailor our customer-focused strategy to ensure we deliver another year of progress, long-term growth and strong returns to our shareholders.”
The dividend will rise by 4.6%, from 7.60p to 7.95p per share.