Greene King cautious but confident

Acquisitions and strong organic growth helped push Greene King's half year turnover up six per cent to £445m and operating profits 11 per cent higher at £111.8m.

Reporting figures for the six months to October 14 2007, Greene King's chief executive Rooney Anand said the group had had a "very successful first half", but he warned the remainder of the year would be more challenging.

"Things are definitely tougher out there and I wouldn't pretend otherwise," he told thepublican.com​.

"We're not immune to the pressures of the smoking ban, consumer uncertainty and cost increases, but we've moved away from the High Street, around 98 per cent of our estate is freehold and we've a long track record of being financially prudent," he said.

Greene King's tenanted and leased estate - Pub Partners - saw revenue up three per cent to £76.6m and EBITDA of £39.5m up eight per cent. Average annualised profits per pub were also up eight per cent at £56,200.

Turnover at the group's managed estate rose eight per cent to £268.2m, with EBITDA up seven per cent to £70m.

Of the changes that took place across the managed estate earlier this year - rejigging it into 490-odd 'Local' and 275 'Destination' sites - Anand said he was pleased with progress so far.

More responsibility was being pushed towards the frontline managers at the Local venues, he said, while the food-led Destination operations were going in a different direction; Hungry Horse would be pursuing a "value-based strategy", although Anand denied this move suggested a price war was imminent among food-led operators in the face of tougher consumer conditions.

"The customer base has broadened and we want to reflect that," he said.

In Scotland, Belhaven reported turnover up five per cent at £58.8m, with its on-trade beer volumes showing growth of four per cent, versus a market decline of seven per cent.

"We always said we'd bought a high quality business [in Belhaven]," Anand said, "and that we'd achieve the returns we said we would. These numbers prove we were right."

Progress was being achieved with the group's Loch Fyne acquisition, Anand said, with two new restaurants opening in Leith and Milton Keynes. Seven more were due to be unveiled in the coming months, he added.

Noting Greene King's most recent acquisition, Anand said the rationale for buying New Century Inns (NCI) was "49 good quality tenanted and leased pubs, strategically located, with opportunities to leverage our beer brands and other technical services through the estate".

Anand said there were "attractive opportunities to change the calibre of [NCI] staff and the look of the pubs".

He bluntly refused to comment on whether the group was looking to buy any more pub estates in the future.