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July 1, 2010 7:51 AM EDT
British pubs group Greene King Plc posted a 3.8 percent rise in its full-year pretax profit helped by a 3.1 percent rise in revenue and a 3.5 percent growth in its retail like-for-like sales.
The company on Thursday said it had maintained margins during the second half and its brewing company continued to outperform during the year with a own-brewed volume growth of 3.6 percent.
Greene King, which operates around 2,500 pubs in England and Scotland, said its overall performance in the first two months of the year had been encouraging and ahead of its expectations for the period.
The company said it had traded strongly in the first eight weeks of the current year to June 27 with like-for-like sales at its managed pubs division up 6 percent over the previous year.
It posted a pretax profit of 123 million pounds for the year to May 2, 2010, up from 118.5 million pounds reported in the year-ago period. Revenue rose to 984.1 million pounds from 954.6 million pounds earlier.
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"We have delivered record revenue in an uncertain and challenging environment, making good progress in all of our businesses. We have generated incremental cash after reducing our debt, paying healthy dividends to our shareholders and funding increased investment in our estate. We have also had an encouraging start to the new financial year with trading to date better than we were expecting," said chief executive Rooney Anand in a statement.
In April, Greene King had projected second-half margins to be broadly in line with the previous year and that this year's acquisitions were trading ahead of expectations. In brewing, the company had said it had continued to outperform the market, with own-brewed sales volumes up 3.9 percent.
ON EXPANSION DRIVE
Greene King is on expansion drive recently. It plans to open 1,100 outlets across UK in three to five years, from its currently 888 outlets.
"We plan to grow our branded, food-led, managed estate by a quarter, create a smaller, more customer focused tenanted business and provide additional investment to our leading beer brands. This strategy will generate faster, profitable sales growth and increase our exposure to the long-term growth of the eating out market,” said Anand.
As part of this strategy, it bought four pubs of Punch Taverns Plc last month for £5.3 million in cash, bringing its total pubs bought from the country’s biggest pub operator to 23 at a cost of £51.6 million.
Greene King raised so far £100 million through a rights issue, which is expected to be completed on July 8.
“They (pubs) are freehold retail sites in great locations currently trading below their potential. We expect to convert the sites into our market-leading pub restaurant brands, Hungry Horse and Eating Inn, further strengthening our position in the UK eating out market,” said Anand in a statement last month.
Shares of Greene King closed flat at 392.30 on Wednesday on the London Stock Exchange.
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