UK: Greene King FY profits fall, shares rally

By | 2 July 2009

Greene King, the UK ale brewer and pub owner, has seen its share price rise by nearly 4% after a 15% drop in pre-tax profits for its fiscal full-year beat analysts' expectations.

Pre-tax profits for the 52 weeks to 3 May fell to GBP118.5m (US$193m), excluding one-off costs, compared to GBP142m for the previous year, Greene King said today (2 July).

Net sales dipped to GBP954.6m, down from GBP960.5m last year, while operating profits fell by 6.7% to GBP216.2m.

Despite the falls, shares in the group, which brews Old Speckled Hen, IPA and Abbot Ale beers, rose by 4% to GBP4.25 on the London Stock Exchange this morning.  

"These results represent a resilient performance by Greene King in what has proved to be one of the toughest trading periods for many years," said the group.

CEO Rooney Anand said: "Trading generally improved from December, although cost pressures remain and both economic and political uncertainty are affecting consumer confidence."

Greene King said that recent trading has been particularly strong and that its brewing business has "sustained momentum" in the new fiscal year. Volume sales of own-brewed beer are up 12% for the new year so far, it said.

Full-year net sales for the group's brewing division rose by 8% to GBP94m, while operating profits were flat against the year before at GBP21.2m. Beer volume sales rose by 1.8%, against a UK beer market down more than 5% in volume in 2008 and down 8% in the first quarter of 2009.

Going forward, Anand said that he was cautiously optimistic about the market and confident that Greene King will outperform many of its competitors. "We are unique amongst the major companies within our sector in paying down debt, continuing to invest in our business and maintaining dividends to shareholders," he said.

In May, Greene King announced that it would raise an acquisition war chest of up to GBP200m via a share rights issue.

Sectors: Beer & cider

Companies: Greene King

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