Greene King toasts weather and confident consumer for strong start

4th Sep 2013 08:27

Brilliant British summer weather helped brewer Greene King outdo last year's strong comparatives and see cautious signs of optimism for the industry.Like-for-like sales at the group's managed pubs business frothed up 4.6% in the 18 weeks to September 1st as the wonderful weather more than counterbalanced the effects of the Queen's Jubilee and European football in 2012. Greene King saw food sales grow 5.7% on a like-for-like basis, with accommodation at its inns up 6.0%, with like-for-like drink sales up 3.7%.Its Pub Partners licensees business lifted average earnings before interest, tax, depreciation and amortisation (EBITDA) per pub by 5.8% after 16 weeks, while like-for-like EBITDA was up 2.7%. The Brewing & Brands business pumped core brand volume up 2.7% after 18 weeks, led by Old Speckled Hen, and total beer volume up 1.5%. Looking forward, the company noted that "there appear to be cautious signs of optimism in terms of recent UK macro-economic improvements" and its strong start to the financial year implied growing consumer confidence. Greene King admitted the performance had been helped by some one-off factors, citing the feel-good factor from continued British sporting success and the arrival of the Royal Baby, combined with much improved weather over the summer months. "While the pace of the recovery remains uncertain, we believe that our strategy, tailored for the prevailing conditions, will continue to deliver improving returns, sustained earnings growth and attractive dividends for our shareholders. We look forward to another successful year," it said. Broker N+1 Singer said it felt it was too early in the year to be tinkering with forecasts, but clearly the strength of the update helps provide a good underpinning to predictions. Analyst Sahill Shan said: "The positive tenor of the update should not come as a huge surprise, albeit the strength of trading further reinforces various favourable features of Greene Kings business model."Shares in Greene King were down 0.1% to 842.5p at 08:11 on Wednesday.OH