Greene King revenues pass £0.5bn
Revenue increased 9% to £527.5m, with operating profit up 5.1% to £115.6m and pre-tax profit up 5.6% to £77.2m, for the 24 weeks to 16 October 2011.
Revenue in its managed retail arm increased 11.8% to £367.5m, based on 3.7% more sites on average in the period (922) - the total number was 950 at the period end. Operating profit rose 9.6% to £70.7m, with operating margin down four percentage points to 19.2%.
Retail now accounts for 70% of group revenue in the first half of the year, with profits up by more than 23% over the past three years.Like-for-like sales were up 4.9% in food - which now represents 40% of sales - and 3% in drinks. Total food sales were up 16.3%.
The most impressive food growth was in its Local Pubs, where the Realpubs and Capital Pub Company acquisitions and investment in facilities saw food sales rise 30%.
Forty sites were acquired or transferred to the division in the period, with five disposed of. The new sites include 33 from Capital, one new build and two transfers from Pub Partners, its tenanted and leased arm. Nine further sites have been exchanged or completed on.
Two further sites were added to the Cloverleaf business, taking it to 13 outlets. Like-for-like sales growth in Cloverleaf is up 5% and Greene King plans to open a further nine Cloverleaf sites by April 2013.Like-for-like sales growth in Realpubs was up 3%. Initial trading at the first Greene King conversion to the format, the Maynard Arms in Crouch End, has been “encouraging”, the firm said.
Capital Pub Company, the 33-string group acquired in September, saw like-for-like sales growth up 12%. Revenue in Pub Partners fell 2.3% to £76.9m as the number of sites in the division reduced by 5.2% to 1,489. Ebidta in the division fell 2% to £38.4m and operating profit declined 2.3% to £34.7m.
However, EBITDA per pub increased by 3.3% to £25.8k, as the overall quality of the estate increases with disposals at the tail, and Greene King took more control over the offer through support schemes such as Business Builder, Love Your Local and Local Hero.
The firm expects to dispose of c.50 sites in H2 and reach 1,200 in 2014.Fourteen sites at the year end were operated under its Meet & Eat franchise agreement and it expects to have 40 sites under the agreement by the end of the financial year.
Around 100 sites have the potential to be on the agreement, Greene King said. Average turnover in the sites converted to Meet & Eat increased from £3.2k to £8.3k and franchisees that hit targets earn £40-45k.
Greene King’s strategy is to operate an estate of 300 sites under new agreement styles with “enhanced influence over the customer offer”. So far it has 193 such sites.In its Brewing & Brands arm, revenue increased 8.5% to £83.1m, with strong growth in the take-home - where volumes increased 14% - free trade and export markets.
EBITDA was up 3.3% to £18.8m. Operating profit increased 4.5% to £16.3, and operating profit margin decreased by 0.8 percentage points to 19.6%.
Rooney Anand, Greene King chief executive, said: “This is another record set of results for Greene King, delivering strong sales, profit and earnings growth in a difficult consumer environment.
Our largest, fastest-growing and increasingly-branded business, Retail, has achieved 10% profit growth, driven both organically and through our Retail expansion strategy."
