E-Malt.com News article: 1901

UK’s regional brewer and pubs group Greene King Plc reported a 10 % rise in its half-year profits on December 9 and said trading since the start of its second-half had been encouraging. The company, which brews Greene King IPA, Abbot Ale and Old Speckled Hen beers and runs nearly 1,700 pubs in southern England posted pre-tax profits of 38.6 million pounds ($67 million) for the 24 weeks to October 19 compared with a consensus forecast of 38 million pounds.

"We are looking forward with confidence, and if a downturn does come, then we are better placed than many others," said Chief Executive Tim Bridge in an interview. "A hot summer is no panacea. But we have managed to increase ale sales in a hot summer and in a falling ale market," said Bridge, adding that often ale-type beers lose out to lagers and that food sales suffer in hot weather.

The 204-year old Suffolk brewer, which has acquired Old English Inns and Morrells pubs over the last two years, posted a 10 % rise in pre-tax profits to 38.6 million pounds ($67 million) for the 24 weeks to October 19, just ahead of consensus analyst forecasts of 38 million pounds. The group's managed pubs, which include its food-led suburban Hungry Horses, showed total like-for-like sales were up 3.8 percent in the half-year and running ahead by the same amount in the first six weeks of the second-half. Comparable sales on an uninvested basis were up 0.6 % in both periods.

The shares jumped 2.1 % to 863 pence by 0850 GMT, edging near the November high of 894p. Greene King shares have outperformed the FTSE 100 index by almost 15 percent since the start of the year but narrowly underperformed close rival Wolverhampton and Dudley Plc since the start of 2003. Analyst Greg Feehely at Altium Capital said the stock is solid and defensive, but that with group turnover just four percent ahead the company needed to drive the business forward.

"They are doing a great job in a competitive environment, but moving forward they need to buy something or buy back shares to keep future growth," said Feehely. Analyst Nigel Popham at Teather and Greenwood said the group had a well integrated model of pubs and brewing, and this gave it a firm basis to make further acquisitions. Greene King shares are rated higher than W&D, but the latter company is in recovery mode and the gap is closing, he said.

Brewing turnover rose 13 % with its Bury St Edmunds brewery pushing IPA sales up three percent, Abbot Ale up four percent and Old Speckled Hen ahead 16 %. The half-year dividend rose 10 % to 9.5 pence a share, while overall turnover rose four percent to 258.2 million pounds and adjusted earnings per share rose 14 % to 37.4p.


10 December, 2003