Greene King Focuses on Sustainable Growth
Greene King, the UK pub retailer and brewer, has reported a 1.8% rise in group revenue to £2.217 billion for the 52 weeks to 28 April 2019 as strong sales growth in the Pub Company and Brewing & Brands businesses offset reduced revenues from the planned rationalisation of the retail estate as the group continued to manage and optimise its portfolio. Group operating profit before exceptional and non-underlying items was down 1.3% to £368.2 million, impacted by £14 million net cost inflation. Group profit before tax, exceptional and non-underlying items was up 1.6% to £246.9 million. Statutory group profit before tax fell by 12.5% to £172.8 million.
Pub Company revenue was up 1.8% to £1.799 billion with strong like-for-like sales growth of 2.9% offsetting the 2.5% decrease in the average number of pubs trading. Pub Company operating profit was up 1.8% to £272.9 million and the operating margin was 15.2%, flat year-on-year.
Nick Mackenzie.
Pub Partners revenue was down 2.0% to £190.1 million, driven by the 5.0% decrease in the average number of pubs trading. Like-for-like net income was up 1.5%, boosted by higher rental income and beer sales.
Brewing & Brands revenue was up 5.8% to £227.6 million with total beer volume growth of 0.9% supported by the good weather and the 2018 World Cup. Own brewed volume (OBV) was down 3.4% ahead of an ale market down 4.1% (source: BBPA). Operating profit was down 10.7% to £27.4 million, driven by the estate rationalisation, increased costs and the lower production volumes in Greene King’s two breweries.
Nick Mackenzie, new chief executive of Greene King, comments: “The business delivered good results last year, regaining trading momentum in Pub Company and returning to market outperformance while fulfilling a strong cost mitigation programme and making further progress refinancing the Spirit debenture. The existing strategy we have in place has led the business through challenging times. I am looking forward to building on Greene King’s strong foundations with a focus on innovation, on developing our people and on customer service to further enhance our brands and deliver sustainable growth for our shareholders.”
