Greene King posts £273m losses
The group made a statutory loss before tax of £273m (2019: £172.8m profit).
This was after £380.6m (2019: £74.1m) of exceptional and non-underlying costs.
The group recorded an exceptional charge of £45m in relation to the Coronavirus, including stock write offs and debt provisions, with a further cash cost of £15m-£20m expected for re-opening the pub estate.
Greene King’s pub company was the division most impacted by the pandemic, with revenue down 13.5% to £1,556.3m, with no trading revenue generated after week 47.
Its Pub Partners leased and tenanted division saw revenue down 16.9% to £157.9m, with revenue from deliveries last being generated in week 47.
Like for like net income for the year was down -2.7%.
Brewing & Brands was the only division to continue trading throughout the period, albeit only to off-trade outlets for the final five weeks of the year.
Revenue was down 10.0% to £204.8m with total beer volume down 13.6%. Operating profit was down 71.9% to £7.7m, driven by the fall in volumes across the year but accelerated by Covid-19 and the relatively high proportion of fixed costs.
Disposal net proceeds were £35.1m, being generated from the disposal of 66 non-core pubs and other various non-pub properties.
Greene King spent £2.9m on three new builds, of which one opened for trade in the period whilst the others remain under construction and should open in the new financial year.
One of the sites has not opened this year as expected due to delays caused by lockdown.
A total of £2.4m was spent completing the refurbishment of three sites that were acquired in the previous financial year. A further £14.8m was spent purchasing the freeholds on five sites and £700,000 was paid on exchange for one further site that will complete in the new financial year.
As part of the acquisition by CKA, the previous estate valuation which indicated a market value of £4.5bn was reaffirmed, versus a book value of £3.5bn.
The financial results were released weeks after parent company CKA Holdings released their own statement.
The Hong Kong-based group said it made “significant operating losses” as a result of the enforced closure of Greene King’s pubs and restaurants, with the recovery forecast to be “long and testing”.
Interim results for 2020 show revenues for Greene King were £376.9m (HK$3,862m).
CKA completed the deal to acquire Greene King in August 2019, valuing the pub company at an estimated £4.6bn, with subsidiary CK Bidco acquiring the entire share capital for approximately £2.7bn.
Chairman Victor T K Li wrote: “Notwithstanding a phased re-opening in the beginning of July, it is expected that the path to full recovery will be long and testing.”
