Record Results at Greene King
Greene King, the British regional brewer and pub group, has increased operating profit before exceptionals to a record £115.6 million in the 24 weeks to October 16th 2011 on revenue up 9.0% to £527.5 million. Profit before tax and exceptional items rose 5.6% to £77.2 million.
Founded in 1799 and headquartered at Bury St Edmunds in England, Greene King currently employs 20,000 people across its main trading divisions of Retail, Pub Partners and Brewing & Brands. It operates 2,410 pubs, restaurants and hotels across England, Wales and Scotland, of which 950 are retail pubs, restaurants and hotels, and 1,460 are tenanted, leased and franchised pubs. Greene King also brews ale brands from its Bury St Edmunds and Dunbar breweries, and is the UK’s leading cask ale brewer and premium ale brewer. Its core ale brands are Greene King IPA, the number one cask ale in the UK, Old Speckled Hen, the top premium ale in the UK, Abbot Ale, the leading premium cask ale in the UK, and Belhaven Best, the number one ale brand in Scotland.
Greene King’s development strategy is to increase its exposure to the more attractive categories of the UK pub market, such as food, coffee, wine and cask ale. This entails growing Greene King Retail to around 1,100 sites and improving the overall quality of the estate by targeted acquisitions and investment. Greene King also plans to improve the quality and sustainability of Pub Partners, its tenanted and leased business, by improving the customer offer, investing in core assets and reducing the estate to 1,200 sites. Another element of the strategy involves increasing investment in the company’s core ale brands.
As part of its Retail expansion strategy, Greene King completed the acquisition of Capital Pub Company in September for £96.0 million to add 33 high quality largely freehold sites located across London to its estate. In line with its strategy to reduce the size of its tenanted and leased estate, Greene King disposed of 47 non-core pubs and other properties during the first half for £12.8 million.
“This is another record set of results for Greene King, delivering strong sales, profit and earnings growth in a difficult consumer environment. Our largest, fastest-growing and increasingly-branded business, Retail, has achieved 10% profit growth, driven both organically and through our Retail expansion strategy. We took further share in the eating out market with 16% food sales growth in the period. Pub Partners continues to reposition itself towards a more sustainable, customer-focused model, while Brewing & Brands has achieved encouraging growth and market outperformance,” says Rooney Anand, chief executive of Greene King. “Falling consumer confidence and the weakening of the UK economic recovery suggest that we will face another tough trading environment in 2012. Despite this, there are still significant opportunities for growth, and we believe our strategy to grow our Retail estate and our share of the eating out market will help us to maintain our track record of strong earnings and dividends.”
