Budget-conscious diners and a focus on holidays such as St Patrick’s day have boosted like-for-like sales at Greene King as the pub company predicts a bumper summer.
The owner of Hungry Horse and Old English Inns, whose full-year results to the end of April will be announced in late June, reported like-for-like sales growth of 4.6 per cent in its managed estate in the 50 weeks to April 15. That was boosted by higher food sales after it capitalised on people dining out on Valentine’s day, Mother’s day and St Patrick’s day.
“Our success at big events and our performance in London, where like-for-like sales are up 6.7 per cent, bode well for the upcoming summer as we are well placed to benefit from the diamond jubilee, Euro 2012 and the Olympics,” said Rooney Anand, Greene King’s chief executive. “We get behind events that trigger customers, despite the doom and gloom, to go out and raise a glass.”
The company, which operates about 2,400 pubs in the UK, reported a weaker performance in its tenanted estate where like-for-like earnings before interest, tax, depreciation and amortisation fell 0.1 per cent over 48 weeks.
Greene King’s ales division, which includes Old Speckled Hen and Greene King IPA, reported a 0.8 per cent rise in volumes amid a beer market in which volumes have fallen, according to the British Beer and Pub Association.
Mr Anand warned market conditions after the summer could be more difficult.
“Beyond the summer it is a tricky one to call – but we’ve shown throughout the course of the downturn the ability to give customers some enjoyment,” he said.
Despite brittle consumer confidence, Greene King has been among the most acquisitive of the big pub companies. Last year it paid £55.8m for Cloverleaf, a pub-restaurant chain in the Midlands; £53.1m for London-based Realpubs; and concluded a £93m deal to buy Capital Pub Company, a collection of 34 mostly freehold pubs in London coveted by smaller rival Fuller, Smith & Turner.
Simon French, an analyst at Panmure, said Greene King was relatively well positioned to ride out the spending downturn.
“The group’s bias towards community pubs limits its exposure to record petrol prices,” he said. “It should benefit from the Olympics in its 250 London pubs, but we think the shares are close to fairly valued at this level.”
The shares fell 1.5p to 517.5p.