Bury St Edmunds: Greene King posts 6.6% increase in underlying profits

Rooney Anand, chief executive of Greene King

Rooney Anand, chief executive of Greene King - Credit: Archant

Pubs and brewing group Greene King today posted a 6.6% increase in underlying annual profits as its chief executive hailed 'another successful year'.

The Bury St Edmunds-based group said total revenues for the 52 weeks to April 28 were 4.8% up on the previous 12 months, at £1.195billion against £1.140bn.

Operating profit was 5.1% up, at £248.2million against £236.2m, with the operating margin across the group's activities 0.1 of a percentage point ahead of the previous year at 20.8%.

Pre-tax profits, excluding one-off factors, were 6.6% up, at £162.0m against £152.0m, although the bottom line figure was down 8.2% on a satutory basis at £114.8m against £125.1m, largely reflecting finance costs and impairment charges which were partly offset by tax credits.

Revenue within Greene King's key retail division, which includes the Hungry Horse and Loch Fyne brands, grew by 7.4% in total to £863.6m and were 2.3% ahead on a like-for-line basis.

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Operating profit was 12.1% up at £167.7m, with the division's operating margin 0.8% of a percentage point higher at 19.4%.

Within the group's tenanted, leased and franchised pubs division, total revenue was 5.5% lower at £153.7m and operating profit was 5.7% down at £68.1m, with the operating margin 0.1 lower at 44.3%,

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However, with the average number of pubs trading during the year 8.8% down, at 1,326 against 1,454, due to disposals or transfers to the retail division, earnings per pub were 4.2% higher at £57,500.

Greene Kings brewing and brands division saw revenue grow by 2.1% to £177.4m but the operating margin fell by 2.1 to 16.9%, leaving operating profit 9.1% lower at £30.0m.

However, the group said that, while the division faced some 'structural headwinds', including supplier cost increases affecting the free trade wholesaling business, declining volume in the tenanted sector and the reduction if its own tenanted estate, there remained 'significant opportunities' for long-term growth.

Core own brewed volumes were 1.0% up on the previous year, helped by a further repositioning towards the long-term growth areas of takehome and export whose combined share of own brewed volumes grew by 3.5 percentage points to 38.3%.

Greene King chief executive Rooney Anand said: 'This has been another successful year with record results and further, significant progress, led by our retail business, which has delivered 12% profit growth.

'Our strategy is on track and we have continued to provide exceptional value, service and quality to our customers. We achieved growth in both earnings and dividends, and further improvement in ROCE for our shareholders.

'We have made a strong start to the year, but the overall outlook remains subdued and we are not assuming a pick-up in the economy.

'However, our strategy is designed, and proven to be appropriate, for these conditions as we shift our business towards higher growth areas of our markets and constantly improve our customer offer.

'We are confident of maintaining this momentum and delivering further value to our shareholders.'

The board is recommendingd a final dividend of 19.45p per share, up 7.5% on last year, taking the total dividend for the year to 26.6p per share, an increase of 7.3%.

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