Greene King to focus on Laurel integration

Suffolk-based brewer Greene King said today the integration of Laurel was going ahead as planned.

As the company released its interim results figures of the first 11 weeks from Laurel showed turnover up 22 per cent to £314.4m and pre-tax profit up 15 per cent to £44.4m. The company also predicted greater synergies than the £6m savings already projected from the Laurel merger.

Finance director Michael Shallow described the results as a mixture of organic growth in the Greene King pub and brewing divisions, plus a large boost from the Laurel acquisition. Underlying trading in the established Greene King estate was steady but unexceptional.

Chief executive Tim Bridge said Greene King could not rule out further acquisitions in the future but "was likely to focus on the successful integration of Laurel for the time being to ensure it got that absolutely right".

The Laurel acquisition was funded by £654.4m debt. The company's gearing is high at 150 per cent which places doubt on Greene King's flexibility if another attractive estate comes to the market in the near future.

The Laurel estate brought a good spread of pubs stretching from southern England through the Midlands to the North requiring disposal of only 13 Greene King pubs to meet competition law requirements. Mr Bridge confirmed another 25 pubs would be shed from the estate.

Overall, food sales continued to go from strength to strength accounting for 35 per cent of turnover across the pub estates, representing a one per cent increase year on year for several years.

Mr Bridge confirmed the company was considering taking more of its food and family-led pubs non-smoking after the move has increased profits through attracting non-smokers at pubs such as the Rushborough Arms in Bury St Edmunds and the Spice Island in Portsmouth. Fourteen of the Laurel pubs already had a non-smoking policy under the strapline "pubs with atmosphere, not smoke".