Greene King doing well in 'very difficult' market

February 1, 2008: The Christmas and New Year saw improved trading over previous weeks Greene King said today, presenting an interim report for the 38 weeks to January 20.

However, while peak days showed growth year on year, trading on other days was more subdued.

In Greene King Retail, managed pub like for like sales are in line with last year at -0.1%, while Loch Fyne, which was acquired in August, had a strong Christmas and New Year period and like for like sales since acquisition are +2.3%.

"Greene King has always taken a long-term approach to its tenants and lessees and remains focused on their viability and profitability," said chief executive Rooney Anand and group finance director IanBull in the report.

"Despite the tough trading environment, Pub Partners, our tenanted and leased business in England and Wales, has grown like for like profit +0.2%. Integration of New Century Inns has been completed and we are very pleased with its progress."

Greene King beer brands continue to do well in what the company describes as a "very difficult" UK market. The Greene King Brewing Company’s own-brewed volumes have grown by 6.5%.

In year two of the smoking ban in Scotland, Belhaven continues to perform strongly; Belhaven Best volumes are up 5.6% and managed pub like for like sales are above last year.

"Group margins remain ahead of last year, despite the well-documented cost pressures being faced by the industry as a whole," said the report.

Since the beginning of the financial year, Greene King has bought back 15.4 million shares for a total value of £149.5 million, at an average price of 973p per share. It says its cashflow performance and balance sheet position are healthy and in line with forecasts.

The report concluded: "We expect the rest of the year to remain challenging. Nevertheless, the inherent strengths of our business, the resilience of our business model and the encouraging contributions from recent acquisitions give us confidence that our earnings expectations for the year to May 4 will be met."