Update: Greene King defies gloom with record annual results

PUBS, restaurants and brewing group Greene King continued to defy the economic gloom today as it posted record annual sales and headline profits.

The Bury St Edmunds-based group, which employs 22,000 people across the UK, including more than 1,300 in Suffolk, reported total sales of �1,140billion for the 52 weeks to April 29, an increase of 9.4% on the previous year.

Operating profit before exceptional items grew by 6.4% to �236.2million and pre-tax profit before exceptionals were 8.6% ahead at �152.0m.

Exceptional charges of �26.9m, largely relating to impairments and acquisitions, saw bottom line pre-tax profit came in at �125.1m, compared with �116.8m the previous year.

At Greene King Retail, the group’s key managed pubs and restaurants division, which generates more than 70% of group sales, turnover grew by 13.1% to �803.9m and operating profit was 13.3% ahead at �149.6m.

The average number of sites trading increased by 5.2% during the year to 938. A total of 51 sites were added, including 33 under the group’s �96m acquisition of the Capital Pub Company in September, while 12 non-core sites were sold.

Like-for-like sales across the division, which includes the Hungry Horse and Loch Fyne brands, were 3.6% ahead, including growth of 2.4% for drinks and 5.6% for food. Operating margin was maintained at 18.6%.

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Pub Partners, the group’s tenanted, leased and franchised pubs division, saw revenue fall by 2.2% to �162.7m and operating profit by 3.1% to �72.2m, impacted by the roll-out of the new franchise model.

However, the average number of pubs trading during the year fell by 6.4% to 1,454, with 103 non-core sites being sold during the year, and earnings per pub increased by 3.8%.

The group’s Brewing & Brands division, which covers its brewing operations in Bury and at Dunbar in Scotland, recorded revenue of �173.8m, an increase of 5.0%, but operating profit dipped by 0.3% to �33.0m.

Volumes for its core ale brands, including Greene King IPA, Old Speckled Hen and Abbot Ale, which are all brewed in Bury were down 0.7% but against the background of a 5.3% decline in the overall UK ale market.

However, IPA, Hen and Abbot all retained their number one positions in their respective sectors and total volumes, including third party drink sales, were 8.1% up.

Greene King chief executive Rooney Anand said: “Our team has once again delivered record results and attractive returns to our shareholders in a difficult environment.

“We have achieved strong growth and made further strategic progress. All our businesses are building customer loyalty by delivering industry-leading value, service and quality as we strive to be Britain’s best pubs and beer business.

“We are in the middle of an exciting summer for Britain, despite the unpredictable weather, with the Diamond Jubilee, Euro 2012 and with the Olympics still to come. However, looking further ahead, our customers’ spending will continue to be squeezed and concerns remain about job security.

“Our strategy is tailored for these difficult conditions as we focus on providing ‘everyday treats’ to our customers and delivering sustainable growth in earnings and dividends for our shareholders.”

Greene King added that the strong momentum in sales had continued into the current financial year, helped by the Diamond Jubilee celebrations and the Euro 2012 football championship.

Like-for-like sales at Greene King Retail were 7.1% up during the first eight weeks of the new year, earnings per pub at Pub Partners were 4.6% ahead and core brand volumes at Brewing & Brands were 2.7% higher.

“We are confident we can continue to make strong progress, no only for this year but also for the long-term,” Mr Anand added.