8 Sep 2017 07:00
Press release
LEI: 213800R9N5F2WRMGTR50 08 September 2017
AGM TRADING STATEMENT FOR THE 18 WEEKS TO 03 SEPTEMBER 2017
At its AGM today, Greene King will make the following trading statement for the 18 weeks to 03 September 2017.
In the first 18 weeks of the year, Pub Company like-for-like (LFL) sales were -1.2%, against a market which declined -0.7%*. Excluding Fayre & Square, which is being rebranded during this financial year, LFL sales were -0.9%. In the first ten weeks, LFL sales were in line with our expectations and broadly in line with last year, despite the tough comparisons from Euro 2016. However, since the second half of July, when the weather worsened, trading weakened.
Over the course of the year so far, most of the LFL sales decline can be attributed to value food, although more recently we saw some softening across other segments. We are continuing to address the challenges of the value food sector through measured capital investment to upgrade and reposition pubs and through selective disposals.
We are strengthening our customer offer with both our net promoter scores and our food quality scores across Pub Company continuing to improve this year, while our brand conversion programme is delivering returns in excess of 20%.
In terms of costs, our programme to deliver £45m of cost savings this year, including further cost synergies from the Spirit acquisition, is on track. The scale of our cost saving programme helps to reduce the impact of weaker than anticipated sales through limiting margin declines from unprecedented industry cost pressures.
Our other two businesses, Pub Partners and Brewing & Brands, continue to deliver strong returns and cash for the company. LFL net profit in Pub Partners was up 1.4% after 16 weeks, with the impact of MRO in line with our expectations. In Brewing & Brands, own-brewed volume was down -0.5% against a UK ale market down -2.9%** and a cask ale market down- 7.0%**.
We remain cautious about the trading environment and expect the challenges of weaker consumer confidence, increased costs and increasing competition to persist over the near term. In the longer term, utilising the benefits of the Spirit acquisition, our brand conversion and cost saving programmes, our robust balance sheet and our strong cash generation will be important levers to help deliver competitive advantage, growth and attractive and sustainable dividends for our shareholders.
*CGA Trading Index 16 weeks to 20 August 2017
**BBPA Three months to July 2017
FOR FURTHER INFORMATION
Greene King plc | Rooney Anand, chief executive officer Kirk Davis, chief financial officer | 01284 763222 |
Finsbury | Philip Walters | 0207 251 3801 |
NOTES FOR EDITORS
· Greene King was founded in 1799 and is headquartered in Bury St. Edmunds, Suffolk. It currently employs over 40,000 people across its main trading businesses; Pub Company, Pub Partners and Brewing & Brands.
· At the end of April, it operated 2,924 pubs, restaurants and hotels across England, Wales and Scotland, of which 1,769 were retail pubs, restaurants and hotels, and 1,155 were tenanted, leased and franchised pubs. Its leading retail brands and formats include Greene King Local Pubs, Hungry Horse, Flaming Grill, Farmhouse Inns and Chef & Brewer.
· Greene King also brews quality ale brands from its Bury St. Edmunds and Dunbar breweries. Its industry leading portfolio includes Greene King IPA, Old Speckled Hen, Abbot Ale and Belhaven Best.
"Time Well Spent"