Greene King's Anand launches attack on duty hike

Greene King chief executive Rooney Anand has warned that 2009 would be "even tougher" than the current calendar year, but declined to outline his vision for how the sector would look in a year's time.

Casting doubt on the government's predictions for a return to a healthy economy, Anand said: "I don't subscribe to the Chancellor's view that the UK economy will see a return to GDP growth in the third quarter of next year."

Anand also launched a stinging attack on Alistair Darling's recent VAT/duty announcements, which saw beer duty rise by eight per cent, despite a VAT cut of 2.5 percentage points.

"It's clear that after dealing with the tobacco industry the government has us in its gun sites," said Anand, who added that the government's attitude towards spirits - which attracted only a four per cent hike in duty - was "very depressing".

But Anand said people would still want to visit - and work in - pubs, even in a depressed economy.

He highlighted an improvement in the group's recruitment strategy, including what he called an "exclusive" contract with the Ministry of Defence to help steer ex-armed forces personnel towards the company's pubs.

Anand said Greene King was likely to focus much of a £235m 'war chest' on capital expenditure in the remainder of its financial year, rather than any large scale acquisitions, chief executive Rooney Anand said today.

Speaking as the Suffolk-based brewer announced a 15 per cent fall in pre-tax profits to £60.7m on flat turnover of £445.5m, Anand said the group had "sufficient headroom" to make a move for pub assets, but was "not signalling any desire to use it".

"The market has a lot concerns about debt and leverage issues," Anand went on, "and our priority is capital expenditure."

Greene King bucked a recent trend among pub operators by maintaining a dividend payment to its shareholders.

"Given that we've met our net debt obligations and that our cash generation is strong if we hadn't paid a dividend it would have raised a few eyebrows," said Anand.

Anand said he was proud on Greene King's 40-year earnings per share (eps) growth record, but was not prepared to sacrifice the health of the group to maintain it.

Greene King's eps fell 4.5 per cent year-on-year, following a 14 per cent rise at the same point last year.