Profits slump for Greene King in ‘challenging’ first half

30/11/2017 - 09:40
Pub operator and brewer Greene King has reported an 8% fall in profits for the first half of its financial year- 24 weeks described by the group’s chief executive as ”challenging”.

Underlying pre-tax profit across the company was £127.9 million, down £11.1m on the same six-month period in 2016.

Total revenue across the company was £1.03 billion, 1.2% down on 2016’s figure of £1.04m despite a 7.9% jump in profits in its Brewing and Brands division.

Chief Rooney Anand said cautious consumer spending, unprecedented costs pressures and poor weather over September and August had hurt H1 profits, but insisted results had picked up in recent weeks.

He said: “The first half was challenging for our managed pubs, but our actions to strengthen performance have produced an improvement since the period end.

“We have committed additional investment to enhance the customer experience, including being more competitive on price, having more team members available at key times and strengthening local marketing activity.

“Pub Partners and Brewing & Brands again outperformed the market, generating cash for the group and raising the profile of Greene King.

“We will continue to benefit from our ability to generate significant cost savings and to improve investment returns to over 25% from rebranded pubs.

“Greene King is a strong, competitive business with industry-leading brands, a strong and flexible balance sheet, a sustainable dividend and an excellent track record of outperforming in challenging conditions.

"We are adapting our strategy to ensure we continue to sustain our long-term competitiveness, strong cash generation and attractive returns to shareholders.”

EBDITA was down 8.2% at £180.7m across Greene King’s managed estate of 1,764 pubs. The estate has fallen 3.2% in size in the last 12 months.

The group’s leased and tenanted estate has also decreased in size by 4.9% with EBIDTA and profits both down 0.2%.

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