First half revenue at Bury St Edmunds-based Greene King tops £1bn for first time
PUBLISHED: 10:00 30 November 2016 | UPDATED: 16:33 14 December 2016
ADAM SMYTH PHOTOGRAPER
Greene King has continued to reap the benefit of last year’s takeover of the Spirit Pub Company, with first half revenues across the pubs and brewing group topping £1bn for the first time.
Bury St Edmunds-based Greene King, which now owns more than 3,000 pubs across Great Britain, said today that group-wide revenue grew by 13.8% to £1.044bn in the 24 weeks to October 16.
The included a 15.6% increase within its managed pubs, restaurants and hotels business – which includes brands such as Hungry Horse, Farmhouse Inns, Chef & Brewer and Flaming Grill – where sales totalled £855.9m.
Revenue from Greene King’s leased and tenanted pubs estate rose by 14% to £93.6m, although sales for its brewing and brands business dipped by 0.6% to £94.8m.
However, all three businesses recorded growth in operating profit for the first half, including an increase of 12.4% for the managed estate to £154.5m, 19.1% for the tenanted estate to £43.7m and 0.7% for brewing and brands to £14.8m.
This left overall operating profit before exceptional items 13% higher at £203.7m, with the pre-tax figure before exceptionals coming in at £139m, an increase of 14.6%.
One-off charges of £46.5m, principally property impairment and finance costs, left the bottom-line pre-tax profit up 9% at £92.5m.
Greene King also said today that synergies from the integration of Spirit are now expected to total £30m this year, meaning the original three-year target will have been achieved a year early.
A total of 50 pubs have undergone brand conversion as part of the integration process, resulting in an average sales uplift of more than 30%, it added.
Greene King chief executive Rooney Anand said: “We have delivered market outperformance and strong integration momentum against a backdrop of continued challenging market conditions.
“Our performance has been driven by growth in all divisions and the synergy benefits from the integration. These have helped to offset increased cost pressures, particularly from the National Living Wage, as well as additional investment in the customer offer to meet higher guest expectations of value, service and quality.”
He added: “The full impact of the UK decision to leave the EU remains unclear. Looking ahead, increasing levels of consumer uncertainty, further cost pressures and the changing dynamics of eating out, mean the consumer environment is likely to become more challenging.
“However, we are confident that the strength of our brands, pubs, people and cash generation leaves us well placed to deliver another year of progress, value creation and returns for our shareholders.”
The interim dividend will rise by 4.1% to 8.8p per shares.