Greene King: pub tenants health improving

The health of Greene King tenants and lessees continues to improve thanks to increased levels of price support, the Suffolk based brewer and pubco has said.

Average Earnings Before Interest, Tax, Depreciation and Amoritisation (EBITDA) was down 4.9% for the 38 weeks to 24 January, but there had been an improvement since 18 October with EBITDA climbing to -0.8% on last year.

"The improvement is being driven by stronger beer sales trends in response to the continued success of our price support for our licensees and is also benefiting from the continued success of our non-core disposal programme in Pub Partners," it said.

"The 'health' of our licensees continues to strengthen and new applications in December were 20% up on the same month last year. We still anticipate targeted licensee support of between £6.0m and £6.5m in this financial year."

Managed pubs​

At its managed division, Greene King retail, like-for-like sales were up 4.3% for the period. Like-for-likes were 5% ahead of last year to the end of 35 weeks.

"We again delivered very strong growth in the two weeks over the Christmas period, despite the tough comparisons with last year," its said.

"Like-for-like food sales growth remains very strong and combined with growth in food-related drinks' sales, continue to drive our underlying performance in both Destination and Local Pubs. It is expected that total like-for-like sales growth will moderate through the rest of the financial year due to ongoing tough comparatives and the VAT rise."

Brewing Company volumes were up 7.2% on last year while its Scottish Belhaven pub business remains on course for a successful year. Retail like-for-likes were up 7.4% with profit per tenanted pub broadly in line with last year. Belhaven Best volumes were maintained at 14.9%.

Acquisition​

Greene King also announced today that it had acquired eight freehold pubs from Punch Taverns for £15.9m (Greene King buys 8 pubs from Punch​) and said it would continue to look for further acquisition opportunities. It has now invested £79m of the proceeds from its rights issue.

"All of our businesses are winning in the marketplace and gaining market share, enabling us to deliver profitable growth despite the challenging conditions.

"We remain focused on providing the best value, service and quality to our customers and our licensees, with a continued commitment to investment and the long-term development of the business."