PUB group Greene King is looking to the current spell of hot weather and England’s progression in the World Cup to lift revenues after posting an 11 per cent fall in annual profit to £243 million.
Shares slumped almost 10% in early trading yesterday as Britain’s biggest pub and brewing company said its full-year sales of £2.2 billion were 1.8% down on a year ago, attributing the performance to the bad weather brought by the “beast from the east” in March and cautious consumers who were concerned about Brexit. Pre-tax profits rose 6.8% to £198m in the 12 months to April 29.
Greene King’s pub division struggled as sales fell 1.2 per cent like-for-like, excluding the impact of snow in March, to £1.8bn in the year to April 29. But it was a game of two halves as the firm’s brewing brands, including its flagship Greene King IPA, Old Speckled Hen and Belhaven, saw revenues increase 7.4% to £215.1m and said trading had improved in recent weeks with like-for-like sales are 2.2% in the past two months.
Rooney Anand, chief executive, remained upbeat but admitted “we are very pleased to see the sun”, adding: “There’s no getting away from the fact that the second half was marred by bad weather – it was quite extreme but we managed to keep the wagons rolling at our Belhaven Brewery thanks to being literally dug out of the snow.
“We’re already seeing a trading boost from the World Cup and the further England progress the better it will be – so we’re rooting for them.”
Mr Anand, who visited Belhaven in East Lothian last week, said that Greene King had invested £10m to improve the customer experience in its pubs, adding: “Our strategic priorities are beginning to pay off. Positive momentum, both in terms of trading and customer satisfaction, is returning to our business.
“While it is still early days, this positive momentum has continued into the new financial year, aided by good weather and popular sporting events. We remain focused on continuing to drive top line growth, developing a more efficient organisation and further strengthening our capital structure to deliver long-term value creation for our shareholders.”
Mr Anand said the Suffolk-based company “has no concerns” that Greene King’s pubs could run out of beer due to the Europe-wide shortage of carbon dioxide used in carbonated drinks, despite reports of low supplies of John Smith’s and Strongbow at some JD Wetherspoon pubs. Earlier this week, Booker, the UK’s biggest wholesaler, which supplies convenience stores and catering outlets, introduced rationing of beer, cider and soft drinks.
Greene King, at the end of the financial year, operated 2,855 outlets across England, Wales and Scotland, of which 1,745 were retail pubs, restaurants and hotels, and 1,110 were tenanted, leased and franchised pubs. “We are a great business with fantastic pubs, great beer brands and talented people,” Mr Anand said. “But we are realistic about what lies ahead because we’re operating in a challenging trading environment and customers are cautious about Brexit.
“We are having to look at the way we purchase and look at ways to be more productive and streamlined,” he continued. “We’re not a business that only addresses on the short-term issues – we are looking at where we want to be in the long term and that means we will continue to invest.
“We expect the trading environment to remain challenging for some time, but we strongly believe people will continue to choose the great British pub as the place to enjoy time with friends and family.”
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