Greene King suffers brewer’s droop in share fall
Suffolk brewer and retailer Greene King saw its UK share price fall 30p on early morning trading after warning that customers were tightening their belts despite the recovery in the UK economy.
Chief executive Rooney Anand was telling today’s AGM that Greene King was deploying a ‘steady as we go’ strategy in terms of garnering new investments until the spending picture was clearer.
Unveiling an interim management statement for the 18 weeks to September 7, Anand was revealing that like-for-like sales in retail were up 0.4 per cent, with tough comparatives from the excellent summer last year compounded by a disappointing World Cup this year.
His statement added: “It is also evident that while the UK economy continues to strengthen, customers remain cautious and are spending very carefully. In response to this, we have protected Retail profitability by being careful not to over-invest in tactical, short-term sales building initiatives.
“Within retail, our accommodation business performed well and we saw particularly strong trading at Metropolitan, our premium London pubs, and Farmhouse Inns, our carvery restaurants.
“Our retail expansion programme continued with a net additional five sites opened in the year-to-date, taking the total estate to 1,037 sites, with a healthy pipeline of potential new sites in place. New sites this year are expected to be significantly weighted towards the second half of the year.
“Our other businesses also traded well: Pub Partners total LFL net income was up 3.7 per cent after 16 weeks, while in Brewing & Brands, own-brewed volume was up 6.2 per cent after 18 weeks, driven by strong growth from Old Speckled Hen, the UK's no.1 premium ale brand. Our balance sheet and cash generation remain strong and in line with our expectations.”
Looking ahead, Anand said the company anticipated that retail like-for-like sales would improve as the year progressed and that the momentum in Pub Partners and Brewing & Brands would also continue.
“More broadly, we remain focused on our strategy of delivering long-term growth and returns to our shareholders through expanding our retail estate, increasing our exposure to the eating out market and driving the best value, service and quality for our customers. Overall, we look forward to another year of continued progress across the business.”