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Revenues at Greene King have risen 58% to £2.1bn in a “transformational” year for the brewer and pub group in which it acquired the Spirit Pub Company.
Pre-tax profits also jumped 61% to £189.8m as a result of the deal in the year ended 1 May, with like-for-like sales in the core pub estate up 1.5%, ahead of the 1.3% recorded in the market.
CEO Rooney Anand, who signed a letter along with other business leaders in The Times urging Britain to remain in Europe, said Greene King had started the new financial year strongly but it was likely that consumer confidence would be affected by Brexit in the near-term.
“However, Greene King has a strong track record of performing well in challenging conditions, we are a resilient business with a talented team and a strong balance sheet, and we will benefit from the opportunities created by the Spirit acquisition,” he added. “We are well placed to continue delivering value to our shareholders.”
Greene King runs more than 3,000 pubs, restaurants and hotels across England, Wales and Scotland, including under the Hungry Horse, Farmhouse Inns, Chef & Brewer, Flaming Grill formats. It also brews the Greene King IPA, Old Speckled Hen, Abbot Ale and Belhaven Best brands.
The pub division, the largest in the group, grew sales 69% to just past £1bn in the year thanks to the combination with Spirit. The brewing and brands business also achieved record revenue of £197m, up 2.2% on last year.
“It has been a transformational year for Greene King,” Anand said. “We completed the acquisition of Spirit Pub Company and reached the milestone of £2bn revenue. We have delivered growth across each of the three divisions, outperforming the market in a challenging environment, while making significant progress in combining the best of both businesses to build Britain’s best pub company.”
Trading in the first eight weeks of the new financial year had strengthened, helped by the European Football Championships and better weather in May, with the pub company like-for-like sales up 2.8%, the group added.
Shares in Greene King opened down 1.5% to 748p this morning.
Morning update
Stevia producer PureCircle (PURE) updated the market this morning on its shipments which were seized earlier this month by US Customs earlier this month over allegations the products were produced using forced labour. The company called the allegations at the time “inaccurate” and said it was “making every effort to resolve the situation”.
PureCircle said today that the shipments have now been released for import into the US. “The company continues to work actively with the US Customs and Border Protection to effect a full resolution of the issue for further shipments,” the statement added. “The company will update the market with relevant news on this as and when appropriate progress is made.”
The share price surged 9.1% to 294.5p on the news, taking the stock 13% higher since opening on Monday.
Value meat retailer Crawshaw (CRAW) has appointed Brakes CEO Ken McMeikan as a non-executive director with effect from 8 July 2016. McMeikan has been in charge of Brakes since 2013 after five year leading bakery chain Greggs. Crawshaw chairman Richard Rose said: “Ken brings a wealth of foodservice, food retailing and high street experience along with expertise in business strategy development during periods of accelerated high street expansion and sales growth. We are excited by Ken’s appointment and look forward to him further strengthening our senior management team during our growth phase.”
Crawshaw also issued a trading update for the 20 weeks trading to 19 June ahead of today’s AGM. Group sales were up 37% as a result of the rapid expansion of its stores across its heartlands, but like-for-like sales fell 1.9%. The business blamed the decline in footfall that is affecting high street retailers in March, the timing of Easter, the start of the European football championships, bad weather and the build up to the EU Referendum. An additional eight shops were opened in the period, taking the portfolio to 47.
CEO Noel Collett said: “We have made a good start to the year. Our trading performance has been in line with expectations as we effectively manage the balance of sales and margin in our like-for-like estate, and our growth strategy continues to progress well.
“In the last couple of weeks, we have seen some distorted and suppressed footfall patterns created through the combined impacts of the start of the international football championships, the adverse persistent weather and the build up to the EU Referendum. It is too early to judge if the vote to leave the EU impacts consumer confidence in the medium term, but clearly our retail format of quality fresh meat at value prices means we are well placed to delight new and existing customers with our offer should disposable income become stretched.”
Crawshaw shares fell 2.5% to 77p on news that like-for-like sales have fallen.
The FTSE 100 continued its recovery as it climbed another 1.7% to 6,246.78 points. Sainsbury’s was also up 2.3% to 227.1p, Morrisons 2% to 181.3p and Tesco 1.7% to 163.2p. However, after strong gains yesterday (see below), Ocado was one of the few stocks in the red, falling 3.2% to 218.8p.
Yesterday in the City
Ocado shares made progress yesterday halting massive declines in recent weeks. The stock climbed 8% to 226p after the online grocer announced sales up 15% to £584m and profits rising to £8.5m in the first half. It is now down 10% since Friday morning and the opening of markets following the EU referendum.
The FTSE 100 also lifted its head above water again after slumps, up 2.6% to 6,140.39 points.
Tesco (TSCO), Morrisons (MRW) and Sainsbury’s (SBRY) also made gains, rising 4.4% to 160.5p, 1.8% to 177.8p and 1.9% to 222p following the latest market share data from Kantar and Nielsen which painted differing pictures of the industry in the recent weeks.
Stocks rebounded generally following big sell-offs in the panic that followed the Brexit vote. Associated British Foods (ABF), which was badly hit, surged 8.7% to 2,555p, Coca-Cola HBC (CCH), rose 6.2% to 1,455p and Greggs (GRG) moved up 6.1% 937.5p.
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