Greene King tenants benefitting from price support

Pricing support and disposals have helped bolster pub earnings across Greene King's tenanted pub estate, the Suffolk brewer said today.

In a trading update - which revealed it had agreed to buy a further eight managed pubs from Punch Taverns for £16m - Greene King said earnings before interest, tax, depreciation and amortisation (EBITDA) across its tenanted pub estate in the 36 weeks to January 24, 2010, was down 4.9 per cent.

Trading in the second half of the year, since 18 October, was 0.8 per cent lower, it added.

Greene King said the improvement was being driven by stronger beer sales trends "in response to the continued success of our price support for our licensees" and was also benefiting from the group's non-core disposal programme.

The 'health' of its licensees "continues to strengthen", the group said, while new applications in December were 20 per cent up on the same month last year.

Greene King said it anticipated targeted licensee support worth between £6m and £6.5m in the current financial year.

The brewer's managed estate's like-for-like sales were up 4.3 per cent during the period, although it said total like-for-like sales growth would inevitably ease throughout the rest of the financial year due to ongoing tough comparatives and the VAT rise.

Greene King's own-brewed volumes were up 7.2 per cent after 38 weeks, while Belhaven Best volumes were up nearly 15 per cent.

The brewer also hinted at more pub acquisitions, following the latest Punch deal. "There continue to be acquisition opportunities that further strengthen and expand our retail offer and geographic presence and which meet the financial criteria set out at the time of [our recent] rights issue," it said.