Further growth for Greene King

PUBS and brewing group Greene King today reported continued growth in sales despite the impact of freezing weather over Christmas and the New Year.

PUBS and brewing group Greene King today reported continued growth in sales despite the impact of freezing weather over Christmas and the New Year.

And the Bury St Edmunds-based company also revealed that it had acquired another eight pubs in a �15.9million deal with Punch Taverns.

In an interim statement covering the 38 weeks to January 24, Greene King said that trading across its businesses over the last nine weeks had remained “relatively strong” despite the negative impact from the recent poor weather.

Like-for-like retail sales were up 4.3% over the 38 week period and, up to the end of week 35, like-for-like sales were 5.0% up, slightly ahead of previously reported trends.

“We again delivered very strong growth in the two weeks over the Christmas period, despite the tough comparisons with last year,” said chief executive Rooney Anand.

“Like-for-like food sales growth remains very strong and combined with growth in food-related drinks' sales, continue to drive our underlying performance.”

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Mr Anand cautioned that like-for-like sales growth was expected to moderate through the rest of the financial year, due to further tough comparative figures and the increase in VAT from January 1, but second half margins were expected to be “broadly in line” with the corresponding period last year.

Within the group's leased and tenanted estate, the improving profit trend continued, with average earnings per pub down just 0.8% so far during the second half against minus 4.9% for the year so far. New applications from would-be licensees were also up 20% in December.

At the group's brewing business, based in Bury, own-brewed volumes were 7.2% up after 38 weeks, a performance described as “especially strong” in view of the poor weather. However, Greene King said the growth in volume was expected to moderate during the second half, given an “extremely sstrong” performance in the closing months of last year.

Belhaven, the group's integrated pubs and brewing business in Scotland, also remained on course for another successful year, Greene King added, with retail like-for-like sales up 7.4%, well ahead of the market, and volumes of Belhaven Best maintained at plus 14.9%.

The acquisition of eight more pubs from Punch is being funded out of the rights issue of new shares completed by Greene King last year.

The latest additions to the estate, described as “very high quality, food-led pubs” in various locations across the UK and generated earnings of �1.3m last year.

“Following this acquisition, we have now invested �79m of the rights issue proceeds, in acquiring 26 high quality, freehold, managed pubs and repurchasing below par debt,” said Greene King.

Mr Rooney added: “All of our businesses are winning in the marketplace and gaining market share, enabling us to deliver profitable growth despite the challenging conditions.

“We remain focused on providing the best value, service and quality to our customers and our licensees, with a continued commitment to investment and the long-term development of the business.

“We are well placed to continue strengthening our competitive position and, whilst the UK consumer outlook is still uncertain, we are confident that we will meet the board's expectations for this financial year.”