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Thu 27th Jun 2013 - Greene King sales close to £1.2bn; names three key eating out trends |
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Greene King reports sales close to £1.2bn: Greene King has reported sales up 4.3% to £1.194bn in the year to 28 April, with pre-tax profit up 6.6% to £162m. Managed like-for-like were up 2.3%. Its tenanted division saw average Ebitda per pub up 4.2%. The company added 38 sites to its managed division to hit 987 sites, with 1,100 managed sites its target for two years hence – the company sold 108 non-core pubs. The company stated: “Even though we experienced a long, cold and wet winter, the robustness of our business and our proven strategy ensured we delivered further strong growth in revenue, up 4.8%, with (managed) leading the way with growth of 7.4%. We continue to focus on providing our customers with the best value, service and quality across our three main markets of eating out, drinking out and staying out. This helped us deliver like-for-like (LFL) sales growth of 2.3% in (managed), split 4.3% growth in the first half and 0.6% growth in the second half (reflecting the more difficult trading conditions experienced after the New Year). This underlying growth was supported by another positive contribution from new sites. (Managed) now generates over 72% of group revenue. Further productivity improvements in labour, tight cost control and acquisition synergy benefits drove strong margin growth in (managed), which more than offset the negative impact of our changing business mix on the group operating margin. Operating profit before exceptional items grew 5.1%. Our strong performance delivered adjusted earnings per share growth of 7.5% and dividend growth of 7.3% for our shareholders in the third year of our retail expansion plan. The impact of estate changes, growing the size and quality of our retail estate and reducing the size, while improving the quality, of our tenanted and leased estate, has driven further improvements in our ROCE. In the year, ROCE rose 40 basis points (bps) to 8.9%, ahead of our cost of capital.” Chief executive Rooney Anand said: “This has been another successful year with record results and further, significant progress, led by our retail business, which has delivered 12% profit growth. Our strategy is on track and we have continued to provide exceptional value, service and quality to our customers. We achieved growth in both earnings and dividends, and further improvement in ROCE for our shareholders. We have made a strong start to the year, but the overall outlook remains subdued and we are not assuming a pick-up in the economy. However, our strategy is designed, and proven to be appropriate, for these conditions as we shift our business towards higher growth areas of our markets and constantly improve our customer offer. We are confident of maintaining this momentum and delivering further value to our shareholders.”
Greene King identifies three key eating out trends: Greene King reported that it has identified three key eating out trends. Customisation: The company said: “We developed ‘fish your way’ in Loch Fyne Restaurants, ‘burger your way’ in Eating Inn, and ‘build your own burger’ in Flame Grill and Meet & Eat. In Eating Inn, there are 560 different combinations of burger for a customer to choose from”; Convenience: The company said: “Our Cakeaway offer in Hungry Horse generated sales of £750,000 in the first full year and in our Local high street sites, we improved the breakfast offer, launched a lunchtime deli deal, and introduced a wider range of sharing platters for ‘after work’ customers.”; Health: The company said: “We introduced a ‘live well’ section on our Eating Inn menu for dishes under 700 calories and we stepped up the number of gluten free dishes in our menus.” The company added: “Wine and coffee are also important long-term growth categories for Retail. Wine sales grew 15.8% and are now up 62% in the last five years. On a per site basis, wine sales grew 11.8%. Our wines won 25 International Wine Challenge awards this year, including 19 sourced directly by our expert wine team. In Metropolitan, our premium Local Pubs estate, we introduced a dedicated wine specialist and developed our own premium, directly sourced, own-label brand, Piazzi. Hot beverage sales, of which coffee is 75%, grew 6.2% and we expect further growth as we grow our breakfast trade. We launched our own coffee brand, Big Bean, which has been successfully rolled out across the Hungry Horse estate. Across the rest of the estate, 86% of our sites use Illy as their coffee offer.”
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