UK: Greene King delivers robust full year, despite pressures
UK brewer and pub operator Greene King has reported an upbeat set of full year results, despite what it has described as challenging conditions.
The company said today (3 July) that full year revenues were up 5% at £960.5m. This lead to operating profit up 8% at £236.2m and profit before tax up 2% at £142.0m.
"Our revenue of £960.5m, up 5% on last year, was driven by a combination of organic growth, contributions from the Loch Fyne and New Century Inns acquisitions and a full year contribution from Hardys & Hansons. Despite an environment of fragile sales and hostile costs, our profit conversion was good," the company said in a statement.
Greene King said that its brewing division enjoyed a strong first half but had a more difficult second half.
"Our own brands performed strongly, and especially so in the take-home market. However, sales of third-party lager and other drinks sales declined year on year in an increasingly challenging on-trade market, which in turn led to under-recovery of our fixed costs," it said.
Own-brewed volume was up 6% on the prior year, with Greene King IPA, Old Speckled Hen and Abbot Ale growing 4%, 9% and 12% respectively. Despite the UK beer market declining by 5%, we grew both our share and our absolute volume.
The company added that in August it will close one of its distribution depots, outsource deliveries to outlying areas to a third party, bring certain other deliveries back in house and improve working practices. Together, these actions will result in savings of around £0.5m in 2008/9 and around £1m per annum thereafter, it said.
"Cost pressures continue but we believe our margin and cash focus will allow us to minimise the impact of these pressures in the new financial year," said Rooney Anand chief executive. "We are better placed than many others due to the resilience and flexibility of our business, and as a result we remain confident of meeting our expectations for the year."
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