Downturn hits Greene King profits

SUFFOLK-based pubs and brewing group Greene King today reported a 15% drop half-year profits amid “one of the toughest trading periods for many years”.

SUFFOLK-based pubs and brewing group Greene King today reported a 15% drop half-year profits amid “one of the toughest trading periods for many years”.

The Bury St Edmunds company also warned that it was preparing for conditions to worsen in the New Year, but said it was “well placed to weather the storm” and was holding its interim dividend at last year's level.

Despite the deteriorating economic environment, Greene King achieved a marginal increase in revenue for the 24 weeks to October 19, up 0.1% on the same period last year at £445.5million.

However, operating profit was down 4.5% at £106.8million and pre-tax profit, excluding exceptional items, was £15.2% down at £60.7million.


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“These results cover one of the toughest trading periods for many years,” said Greene King chief executive Rooney Anand.

“Despite this, our performance has been solid across the business, meeting market expectations and demonstrating yet again the strength of the integrated business model and the benefits of our long-term investment.”

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Greene King said it had achieved sales growth across the key retail categories of food, wine, cask ale, coffee and accommodation, including gains in market share - by both volume and value - in the on- and -off trade ale markets.

The balance sheet remained sound, with a net debt repayment during the period of £14.4million, the group added, and it remained within its banking covenants by a “comfortable” margin, with no debt refinancing requirement until 2012.

Continue investment in the pub and restaurant estate was delivering health returns, it added, although costs were being controlled to protect profits.

Mr Anand added: “External conditions are likely to worsen in the New Year and so we continue to realalign our businesses to reflect the rapidly changing environment and address our cost base to protect our profitability.

“These actions, combined with prudent investment in the business, a sound balance sheet and health cashflows, are further enhancing our relative strength in the industry. This leads me to believe we remain well place to weather the storm and to continue to advance over the long term.”

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