Greene King cites ‘unprecedented costs’ for share dip
Greene King has cited ‘unprecedented cost increases of £60m’ levied against the National Living Wage, business rates, the Apprenticeship Levy and duty increases as the reason its shares have dipped by more than 3 per cent for the six months to October.
The pub group, which owns Belhaven as well as the Hungry Horse and Chef & Brewer brands, admitted that it had had a ‘challenging’ first half of the year. Posting an 8 per cent fall in pre-tax profits to £127.9million, it also announced that it was planning to sell off up to 60 pubs as its managed estate revenue fell by 1.4 per cent.
In its interim results summary, it quoted that eating out statistics [down 13% YOY to October] following on from previous declines, had shown that consumers were tightening their belts. The company also warned that drink-led outlets were expected to continue to fall.
Regardless, Greene King said that its 1,200 tenanted and leased Pub Partners, as well as its Brewing and Brands and Local Pubs divisions outperformed the markets. However, trading was tougher for its 1,800-strong managed Pub Company division, where like-for-like sales were down 1.4%. Total revenue fell 2.2% to £837m.
Rooney Anand, chief executive of Greene King, said: “The first half was challenging for our managed pubs, but our actions to strengthen performance 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 marketing activity. ”
Greene King’s group revenue fell by 1.2% £1.03b. Adjusted profit before tax was down 8% to £127.9m.