Greene King delivers solid interims but remains cautious

Pub operator Greene King has delivered solid interim results driven by a good performance from its retail division, although warned that trading conditions are likely to remain challenging for the rest of the year.

Pub operator Greene King has delivered solid interim results driven by a good performance from its retail division, although warned that trading conditions are likely to remain challenging for the rest of the year.

For the 24 weeks ended October 14th, revenues grew 7.3% to £566.2m (H1 2012: £527.5m) driven by 10.9% growth in retail, which now generates 72% of group sales.

Pre-tax profits were up 48.7% to £84.3m (H1 2012: £56.7m), with operating profit before exceptionals increasing 6.1% at £122.7m (H1 2012: £115.6m). Stripping out exceptionals, pre-tax profits were up 7.1% at £82.7m (H1: 2012: £77.2m).

The FTSE-250 firm is in the third year of its strategic plan to grow the size and quality of its retail estate and reduce the size and improve the quality of its tenanted and leased estate. This has led to an improved return on capital employed (ROCE); on a rolling 12-months basis, ROCE has risen 20 basis points (bps) to 8.7%, well ahead of its cost of capital.

As a result of the strong performance it has declared an interim dividend of 7.15p per share, up 6.7% on last year.

Net debt at the period-end was £1,462.9m, a reduction of £30.3m from the previous year-end, with the key movements being positive free cash flow of £36.9m, disposal proceeds of £13.6m and investment in growing its retail estate of £21m.

Rooney Anand, Greene King Chief Executive Officer, said: "Trading conditions are likely to remain challenging for the rest of this financial year as our customers maintain a prudent approach to spending.

"However, our strategy is tailored to the conditions, as it provides 'everyday treats' for our customers, and we remain confident that we can continue to deliver sustainable earnings and dividend growth for our shareholders."

CM

Recommended

Share tips of the week - 12 August
Share tips

Share tips of the week - 12 August

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
12 Aug 2022
Britain’s ten most-hated shares – w/e 9 August
Stocks and shares

Britain’s ten most-hated shares – w/e 9 August

Rupert Hargreaves looks at Britain's ten most-hated shares, and what short-sellers are looking at now.
10 Aug 2022
Aviva: One for income investors to tuck away
Share tips

Aviva: One for income investors to tuck away

Insurance giant Aviva is one of the highest yielding stocks in the FTSE 100 – and it’s cheap, too, making it a tempting target for income investors. R…
10 Aug 2022
Director dealings w/e 5 August: what company insiders are buying and selling
Stocks and shares

Director dealings w/e 5 August: what company insiders are buying and selling

Directors’ share dealings can often give investors an insight into the sentiment of company insiders. Here are some of the biggest deals by company di…
9 Aug 2022

Most Popular

UK House Prices Set To Fall? It’s Not So Simple
House prices

UK House Prices Set To Fall? It’s Not So Simple

Figures suggest UK house prices are starting to slide, but we shouldn’t take these numbers at face value, explains Rupert Hargreaves.
11 Aug 2022
Are UK house prices finally heading for a crash?
House prices

Are UK house prices finally heading for a crash?

The latest house price figures show a fall of 0.1% in July. With interest rates rising, inflation hitting double figures and a recession on the cards,…
5 Aug 2022
Why now is a good time to buy diamond miners
Commodities

Why now is a good time to buy diamond miners

Demand for the gems is set to outstrip supply, making it a good time to buy miners, says David J. Stevenson.
12 Aug 2022