Greene King "now stronger than before recession", claims CEO

Greene King is in a stronger position now than it was before the start of the economic downturn, according to the Suffolk brewer's chief executive Rooney Anand.

"We believe we are in a stronger position now than we were two years ago, when the initial warning signs of an impending slowdown appeared at the front line of our businesses," he said.

Despite coming through what he described as the "toughest trading period for many years", Anand's bullish assessment of his company's position came as the group announced pre-tax profits for the year to May 3, 2009, down 15 per cent at £139.4m on turnover up of £942.3m, up 1.3 per cent.

Basic earnings per share came in at 72.6p, down 8.4 per cent, while the group maintained its final dividend at 15.1p, making a 22.4p dividend per share for the full year, in line with 2007/08.

Acknowledging that consumer confidence was being undermined by "economic and political uncertainty", Anand said the pub sector was polarising, "with the weaker players underperforming and reducing investment, whilst the stronger players have healthier profits and cash conversion, are maintaining investment, accelerating market share gains and selectively targeting acquisitions".

Anand said the recent acquisition of 11 managed Punch Taverns pubs for £30.4m, which completed yesterday (July 1), was evidence of the latter strategy.

Bolstered by its recent rights issue, which generated more than £200m for the group, Greene King had "the best assets, brands and people to continue growing our share of the market", he added.

On current trading Anand said the group's tenanted estate had seen trends stabilise "and remain in line with the underlying performance from the second half of 2008/09", Anand said.

"The actions we have taken to support our licensees are beginning to take effect and we have seen a better volume performance in the last five weeks."

This support during the year had included £4m of financial help for tenants, though Anand warned the group was not a "charity".

Instead such help was conditional "on our licensees changing elements of their business to increase their consumer appeal".

Greene King's managed pub estate had seen like-for-like sales up 5.2 per cent in the first eight weeks of the new financial year, while its Belhaven pub business had recorded like-for-like sales up 10.2 per cent in the same period.

Own-brewed beer volumes were up 12.1 per cent, he added.

(More details to follow)