A warm summer and the World Cup provided pub chain and brewer Greene King “positive momentum” for a boost in sales, the company has revealed in its latest trading update.
The Greene King IPA, OId Speckled Hen and Abbot Ale brewer saw an increase in like-for-like sales of 2.8% in the 18 weeks to September 2.
Growth over the last 10 weeks was at 3.2%.
Greene King’s branded local pubs traded well, with comparable sales up 5.5%, driven by football fans during England’s impressive run to the World Cup semi-finals.
A total of 3.7 million pints of beer were sold during England’s seven World Cup matches and like-for-like sales on the day of the semi-final were up 61%.
Greene King said: “This strong performance was underpinned by the ongoing benefits from our sales driving investment to further improve our value, service and quality, and boosted by the weather and a successful World Cup.”
The operator said it remained on course to dispose of 100-110 pubs this year while expecting to open around nine new venues.
Greene King shares surged 11% in early trading.
Russ Mould, investment director at AJ Bell said that nothing in Greene King’s statement should have been a surprise, “on first take.”
“Sales have been boosted by the hot summer weather and England doing well in the World Cup.
“These were obvious catalysts which should have already been priced in by the market.
“But in the case of Greene King, the market has clearly been worried about other issues, hence why its share price had been in a falling trend throughout the summer, up until today.
“Many analysts have been bearish on the stock and reduced earnings expectations earlier this year, expressing concerns about trading health and whether it would generate enough free cash flow to pay for the much-prized dividend.”
In November last year, Greene King warned of tough market conditions “for the next two to three years” after higher costs and a squeeze on household incomes were blamed for a fall in first-half profits.
Pre-tax profits, stripping out one-off items, fell 8% to £128m for the 24 weeks to 15 October 2017 compared with the same period in the previous year.
The group, based in Bury St Edmunds, Suffolk, was founded in 1799 and operates nearly 3,000 pubs, restaurants and hotels, and owns brands including Hungry Horse and Chef & Brewer.
It currently employs around 39,000 people.
From – SkyNews
