Greene King warns of tough times

04-12-2007

Greene King warns of tough times
Pub firm and brewer Greene King is confident its full-year earnings will meet expectations, despite the prospect of tougher trading conditions.

In a statement today the company reported "record" first-half results, confirming an 11 per cent increase in operating profit before exceptional items over the period.

Greene King's operating profit rose to £111.8 million in the 24 weeks to October 14th, while pre-tax profits increased by seven per cent to £71.6 million.

The group's operating profit margin also improved by just over one point, rising to 25.1 per cent, while sales were up six per cent to £445 million.

But the company warned of tougher times ahead, with pub groups facing the first period of winter trading since the introduction of the English smoking ban, higher costs and growing concerns about the strength of consumer confidence.

"We have had a very successful first half but we expect the remainder of the year to be more challenging," stressed Greene King chief executive Rooney Anand.

"We will, however, benefit from the underlying strength of our business, recent acquisitions and our strong financial management," he added.

Mr Anand said Greene King's first-half performance had been underpinned by sales and profits growth across its businesses, with £126.4 million of share buy-backs also generating "substantial" earnings growth over the period.

Like-for-like sales increased despite the introduction of the English smoking ban in July, while Greene King reported a 16 per cent increase in operating profits for its Scottish pub estate Belhaven – a year on from the implementation of a similar ban there.

Greene King said operating profit at its Pub Partners division increased by eight per cent over the first-half, while the brewer of Old Speckled Hen and Abbot Ale said its brewing company also experienced volume and share growth.

The company has increased its interim dividend payment by 13 per cent, to 7.3p.

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