Greene King has reported Interim results for the 24 weeks to 13 October 2013. Rooney Anand, Greene King chief executive officer, commented:
“This is a very pleasing set of figures and we have made great progress in the first half of this financial year. Growth has once again been led by our retail business, which grew profits by 8% over last year, helped by a combination of organic growth and further strategic acquisitions. The tenanted and brewing businesses also performed well, helping the overall business to deliver healthy earnings, dividend growth and further improvement in our return on capital employed.
While trading through the first half of the year and since the period-end has been strong, and the economic outlook looks to be improving, customers remain careful with their money, particularly outside London and the South East. We believe that our strategy, tailored for these conditions, will continue to deliver growth and further value to our shareholders across the rest of this year and beyond.”
|
24 Weeks |
H113 |
H114 |
|
| Total revenue | £566.2m | £595.4m | +5.2% |
| Operating profit* | £122.7m | £127.2m | +3.7% |
| Operating margin* | 21.7% | 21.4% | -0.3%pts |
| Profit before tax*,** | £81.0m | £85.6m | +5.7% |
| Statutory profit before tax** | £82.6m | £65.6m | -20.6% |
| Adjusted basic earnings per share*,** | 28.6p | 30.4p | +6.3% |
| Dividend per share | 7.15p | 7.60p | +6.3% |
Performance highlights
- Retail like-for-like sales up 3.5%; Retail margin increased ten basis points to 20.5%.
- Average EBITDA per pub up 5.2% in Pub Partners; core like-for-like EBITDA up 1.7%.
- Brewing & Brands core own-brewed volume up 1.7%.
- Strong cash flow; earnings & dividend growth.
- Further improvement in ROCE, up ten basis points since the year-end to 9.0%.
- Current trading strong; Retail like-for-like sales up 3.5% after 30 weeks.
Strategic progress
- Strong growth from key sales categories; food now 41% of Retail sales.
- 1,008 Retail sites with 22 added; targeting further 90 sites over next 18 months.
- 59 disposals in Pub Partners; trading estate now 1,218 sites, down 28% from peak.
- Further balance sheet strengthening; net debt to EBITDA has fallen to 4.6x.
Acquisitions
In the period, further progress made with the expansion of the Retail business. £9.6m spent on acquiring 14 new sites and exchanged on a further six sites for development. At the period-end, 1,008 Retail sites, up from 888 sites at the start of the Retail expansion strategy.
Disposals
Continuing the disposal of sites that are considered no longer to have a long-term sustainable future within the estate. These mainly come from Pub Partners, from which 59 sites were sold during the period. At the period-end, the Pub Partners trading estate totalled 1,218 sites, down from a peak of 1,700. In total, the disposed properties raised proceeds of £16.6m, just ahead of book value.
Strategy
Now in the fourth year of the current five-year strategy to improve growth and returns to shareholders through increasing exposure to more attractive categories in Greene King markets. Further material progress in the year so far:
- Expanding Retail to 1,100 sites and improving estate quality. 22 sites acquired or transferred to take the estate to 1,008 pubs, restaurants and hotels. Of these sites, eight are new Hungry Horse sites, six are Old English Inns (OEI) sites and two are Metropolitan sites.
- Reducing the Pub Partners estate, improving estate quality and increasing offer influence. In Pub Partners, disposed of 59 non-core sites and transferred eleven sites to Retail. Average EBITDA per pub grew 5.2% and there were 481 sites under an element of central offer influence.
- Maintaining industry-leading brand investment to strengthen leadership position. Invested in core ale brands to drive own-brand volume (OBV) growth and UK ale market outperformance in Brewing & Brands. Increased volume share of the UK ale market by 30bps to 10.8%.