Greene King serves up higher profits despite challenging environment

By Luke Nicholls

- Last updated on GMT

Related tags: Greene king, Generally accepted accounting principles

Greene King's portfolio of brands includes Hungry Horse, Old English Inns, Eating Inn and Loch Fyne Restaurants
Greene King's portfolio of brands includes Hungry Horse, Old English Inns, Eating Inn and Loch Fyne Restaurants
Pubs, restaurants and hotels business Greene King shrugged off the wet weather and a difficult regulatory environment by posting a strong set of financial results for the half-year to 14 October as the Suffolk-based company achieved a 7 per cent rise in pre-tax profit to £82.7m.

The group, which owns the Loch Fyne and Hungry Horse chains, saw like-for-like sales (which strip out the impact of new openings) rise 4.3 per cent, while total revenue now stands at £566.2m, up 7.3 per cent on last year.

“We’ve continued to focus on providing excellent value, service and quality to our customers, while improving productivity and keeping tight control of costs,” said Greene King’s chief executive Rooney Anand. “This has led to strong sales and profit growth, increased cashflow, improved returns and a stronger balance sheet.”

Anand was quick to point out the difficult conditions in which these positive set of results were achieved, adding: “Despite the adverse weather conditions, which negatively impacted on trading throughout the summer, including at big events such as the Diamond Jubilee, our growth has been achieved.

“Whether it is the duty escalator, machine gaming tax or further red tape, the regulatory environment remains a challenge for the pub and beer sectors. However, we do support the government’s planned introduction of a minimum unit price for alcohol as we believe it is a well-targeted measure for helping to reduce irresponsible retailing and consumption of alcohol.”

Expansion & reduction

Greene King operates 2,298 pubs, restaurants and hotels across England, Wales and Scotland - of which 972 are retail pubs, restaurants and hotels, and 1,326 are tenanted, leased and franchised pubs – and employs 22,000 people.

Speaking of the group’s plans to grow its portfolio, chairman Tim Bridge said: “We continue to expand our retail estate. During the first half of the year we acquired eight pubs for £5.9m and exchanged or completed on six additional sites for development.

“We are also focused on reducing the size of our tenanted estate. During the first half of the year, we disposed of 55 non-core pubs and other properties for £13.6m, ahead of the book value of the assets concerned.”

Greene King’s financial statement also revealed that it boosted its share of the £41bn informal dining market by broadening its food offers to drive growth.Against a market that is growing value at around 3 per cent, food sales in Greene King's retail division were up 12 per cent for the period.

Related topics: Pubs & Bars, Trends & Reports, Business

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