Challenging First Half For Greene King
Greene King, the UK brewer and pub operator, has reported a 1.2% decline in revenue to £1.031 billion for the 24 weeks to 15 October 2017 and a 7.5% drop in operating profit before exceptional and non-underlying items to £188.4 million, compared to the corresponding period last year. The operating margin before exceptional and non-underlying items was 18.3%, down 1.2%pts on last year. Profit before tax and non-underlying and exceptional items fell by 8.0% to £127.9 million.
Greene King was adversely affected by a challenging first half of the year, characterised by UK consumer spending more cautiously and unprecedented cost pressures impacting on the pub sector. Sales and operating profit declined at both Greene King’s Pub Company and Pub Partners businesses. Brewing & Brands revenue was up 7.9% to £102.3 million while operating profit was in line with last year at £14.8 million and the operating profit margin was down 1.1%pts.
Rooney Anand, chief executive of Greene King.
Rooney Anand, chief executive of Greene King, comments: “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. Pub Partners and Brewing & Brands again outperformed the market, generating cash for the group and raising the profile of Greene King.”
He elaborates: “We will continue to benefit from our ability to generate significant cost savings and to improve investment returns to over 25% from rebranded pubs. Greene King is a strong, competitive business with industry-leading brands, a strong and flexible balance sheet, a sustainable dividend and an excellent track record of outperforming in challenging conditions. We are adapting our strategy to ensure we continue to sustain our long-term competitiveness, strong cash generation and attractive returns to shareholders.”
