Greene King interim half yearly results reflect tightened consumer spending but with brewing and Pub Partners outperforming their market
Greene King’s half yearly results to October 15 reflect a tightening of belts by consumers with a downward trend for its Pub Company arm and an interim dividend stationary at last year’s figure of 8.8p.
However the Bury St Edmunds based company expresses confidence in its long term strategy and states that its Pub Partners and Brewing & Brands sectors outperformed the market.
Pub Company like for like sales were down 1.4 per cent, Pub Partners up 1,5 per cent and Brewing & Brands own brewed up 0.3 per cent.
Total operating profit before exceptional and non underlying items stood at £188.4 million, down 7.5 per cent on the same period last year with total revenue down 1.2 per cent at £1,031.4 million.
Poor August and September weather was reflected in the Pub Company results with under performance in the value food brands.
The company is now investing £10 million to improve its trading performance here and this has led to early signs of drink volume and food cover recovery.
Chief Executive Officer Rooney Anand said: “The first half was challenging for our managed pubs, but our actions to strengthen peformance have produced an improvement since the period end.
“We have committed additional investment to enhance the customer experience including being more competitive on price, having more team members available at key times and strengthening local market activity.”
The trading environment saw companies affected by the National Living |Wage, business rates, the Apprenticeship Levy and duty increases with disposable income squeezed by inflation rising faster than earnings.
City analyst Fiona Cincotta of City Index said: “There is some evidence here that investments in pub upgrades are gaining traction via volume growth though it’s still very early days. “Pleasingly the dividend has been held steady, highlighting the relative strength of the company’s balance sheet and cash flow.
“Overall this result hasn’t offered investors a great deal to celebrate.”