Greene King in confident mood, despite gloomy economy

Brewer and pub operator Greene King believes that despite growing pressure on household spending it expects to deliver "another successful year" for its investors.

In an interim management statement issued today Greene King admitted the trading environment for tenants and lessees across the pub trade "remained challenging", however it said average earnings before interest, tax, depreciation and amortisation (EBITDA) per its tenanted and lease pubs had risen 0.7 per cent in the first 16 weeks of the current financial year.

The Bury-St-Edmunds-based group said it would look to "continue to improve the overall quality of our estate and retailing skills of our licensees", adding that it would soon be in a position to launch its new Code of Practice, following the document's accreditation by the BII.

Greene King said its managed pub estate had seen like-for-like sales in the 18 weeks to September 5, 2010, rise 4.4 per cent, although one City analyst said this implied a "softening" from the six per cent growth figure at the eight week point in the financial year.

Like-for-like sales in its Belhaven managed pubs were up 3.3 per cent over the same period, up from the 1.5 per cent rise at eight weeks.

Despite strong like-for-like food sales growth of 8.6 per cent in the managed estate Greene King said it seen margins "slightly ahead" of last year, though it did not give a figure. The group's chief executive, Rooney Anand, said the business would continue to expand its managed pub operation, from its current near-900 pubs to around 1,100 sites.

The group admitted its own-brewed volumes were down nearly five per cent in the 18 week period - a figure which City observer suggested had "spooked a number of people" - against an ale market down around eight per cent. Belhaven volumes were up three per cent.

Looking ahead, Greene King's Rooney Anand said: "The economic and consumer environment remains uncertain as a number of significant headwinds, including public sector cuts, benefits reform and the impending VAT rise, are likely to affect future household spending.

"However, we are confident of delivering another successful year for our shareholders, in which we will continue to expand our retail businesses and to invest in our brands to generate market share gains and deliver industry outperformance."