Greene King buys Cloverleaf Restaurants for £56m

Greene King has used up the remaining proceeds from last year's rights issue by buying and investing in Cloverleaf Restaurants, a Blackburn-based pub...

Greene King has used up the remaining proceeds from last year's rights issue by buying and investing in Cloverleaf Restaurants, a Blackburn-based pub restaurant chain.

The Suffolk brewer paid £55.8m for the company, which operates 12 sites across the North of England and the Midlands, with a further 10 to be opened within two years.

Based on the existing estate the deal was equivalent to 8.7 times annualised earnings before interest, tax, depreciation and amortisation (EBITDA), it said.

In a statement Greene King said Cloverleaf was "well positioned to capitalise on the growing carvery market", with like-for-like sales growing faster than its own managed pub business.

As well as the acquisition costs, a further £25m will be pumped into the Cloverleaf estate.

Greene King also updated the market on recent trading, which it said had been hit by poor weather in the run up to Christmas, but had seen an improvement in January, thanks to easier comparables with this time last year.

In the 38 weeks to January 23, 2011, the brewer's managed pub estate saw like-for-like sales up 3.9 per cent, with Belhaven's managed pubs up 3.6 per cent. Food sales across the managed pub business rose 8.2 per cent. The brewer said it expected managed pub margins for the full year to be slightly ahead of last year.

In its tenanted pub business EBITDA per pub was up 0.6 per cent, with average EBITDA per pub up 1.9 per cent.

Greene King's brewing operation saw own-brewed volumes down 3.3 per cent.

The group said that while the short term outlook for the economy was unclear it believed it would meet its financial expectations for the full year.