Greene King has today reported its Preliminary results for the 53 weeks to 4 May 2014, with Rooney Anand, Greene King chief executive officer, commenting:
“We have delivered four years of record results since the credit crunch and maintained this momentum over the last 12 months by giving our customers what they want, in the right way and at the right price. Profit growth of 12% in our largest business, Retail, was driven by strong like-for-like sales growth and by newly-acquired sites. Pub Partners and Brewing & Brands also performed well. As a result, we achieved strong earnings, ROCE and dividend growth for the year.”
Higher expectations
However, some opinion on these results has expressed disappointment with current trading, and Joshua Raymond, Chief Market Strategist of cityindex.co.uk* commented:
“Greene King reported like for like sales growth of 4.1% with food sales rising 5%. Revenues rose 8.9% to £1.3bn whilst pre-tax profits for the full year hit £105.2mn.
“This is a solid report that sees the group present yet more record results based on strong sales growth – but the market had higher expectations. Many investors were hoping like for like sales could grow as much as 4.5% whilst the final dividend hike of 6.9% to 20.8p a share came in towards the lower end of expectations. As a result, share prices fell 3% in trading with some investors happy to reduce some of their holdings.”
*Source: http://www.cityindex.co.uk/market-analysis/analysts/joshua-raymond/
Financials
| F13 (52w) | F14 (53w) | Change | Change (52w basis) |
Total revenue | £1,194.7m | £1,301.6m | +8.9% | +6.9% |
Operating profit* | £248.2m | £265.6m | +7.0% | +5.0% |
Operating margin* | 20.8% | 20.4% | -0.4%pts | |
Profit before tax*, ** | £158.2m | £173.1m | +9.4% | +7.4% |
Statutory profit before tax** | £111.0m | £105.2m | -5.2% | |
Adjusted basic earnings per share*, ** | 55.6p | 61.4p | +10.4% | +8.3% |
Dividend per share | 26.6p | 28.4p | +6.8% |
*before exceptional items **F13 restated for impact of IAS 19 (revised 2011), see note 11 of preliminary financial statements
Performance Highlights
- Retail like-for-like sales up 4.1%; food like-for-like sales up 5.0%.
- Average EBITDA per pub up 5.2% in Pub Partners; core like-for-like net income up 2.2%.
- Brewing & Brands core own-brewed volume up 4.6%; profit up 1.3%.
- Strong cash flow, lower leverage, earnings & dividend growth.
- Return on capital employed up 30 basis points to 9.2%.
- Continued progress across all businesses in first eight weeks of new financial year.
Strategic Progress
- Portfolio reshaping better positions Greene King for growth and higher returns.
o Added 45 sites to Retail, taking estate to 1,032; Hungry Horse now 226 sites.
o 148 disposals or transfers from Pub Partners; sold 275 site package post year-end.
- Volume share of UK ale market up 70 basis points to 11.3%.
- Evolving strategy to accelerate Retail exposure and move beyond conventional pub offers.
Outlook
Rooney Anand, Greene King chief executive officer, also commented:
“There are now clear signs that both the UK economic outlook and consumer confidence are improving, although consumers continue to spend cautiously. While continuing to provide customers with great value for money, excellent service and industry-leading quality, we see the pace of change in how people eat and drink out of home quickening and so we are shaping the business for the future to benefit from the opportunities these changes will bring.”