Greene King, the brewer and pub operator, has reported another year of record profits and growth, with turnover up 9.4% to £1.14bn and pre-tax profit rising 8.6% to £152m.
The managed Retail arm saw like-for-like growth of 4%, including food sales growth of 17%. Average EBITDA in its Pub Partners tenanted division increased by 4%, while revenue in Brewing & Brands was up 5% to £173.8m on an 8% rise in volumes.
Overall operating profit was up 6.4% to £236.2m. Adjusted earnings per share increased 10% to 53p and dividend per share was up 7.4% to 24.8p.
In the Retail division, revenue was up 13.1% on a 5.2% increase in trading outlets to 938. EBITDA increased 10.8% to £191.7m and operating profit increased by 13.3% to £149.6m. EBITDA per site was up 5.4% to £204,400, the first time it has broken the £200,000 mark.
Greene King said it achieved like-for-like growth in its three main sales categories with drink like-for-likes up 2.4%, food like-for-likes up 5.6% and room like-for-likes up 2.9%.
Food is now 39% of total sales, a 120bps improvement on last year. Its food sales reached more than £300m, and Greene King said there’s a “significant long-term opportunity” in the UK eating out market that’s worth £42bn. Total food growth was 16.8%, or 5.6% on a like-for-like basis.
Innovations in the year included offering lower calorie dishes, takeaway options and new menu ideas such as “fish your way” in its Loch Fyne Restaurants.
Greene King said it’s “on-track” to deliver its target of operating 1,100 Retail sites. It added 51 in the year – 44 from the Capital Pub Company acquisition, two new-builds and five transfers from tenancy – and disposed of 12.
In Pub Partners, revenue fell 2.2% on a 6.4% decline in site numbers to 1,454. EBITDA fell 2.9% and operating profit declined by 3.1%.
Per pub EBITDA, however, increased by 3.8%, reflecting the bottom end disposals. Beer volume per pub was down but rental volume was ahead. Like-for-likes in the core estate increased by 0.2% and total like-for-likes were down 0.3%.
Greene King said there were 29 temporary agreements at the year end, or 2.1% of its trading pubs, the lowest recorded trading level since 2003.
There were 29 Meet & Eat franchises at the year end. AWT has risen 150% to £8,000 per week in the sites, while franchise earnings are “on target” for £40,000 per year.
In Brewing & Brands, EBITDA was up 0.3% to £38.4m although operating profit fell 0.3% to £33m. Core ale brands declined by 0.7%, which Greene King attributed to a “more competitive environment in Scotland”, price increases and difficult comparatives.
A net exceptional charge of £11.6m was recorded, consisting of a charge of £26.9m against profit before tax and an exceptional tax credit of £15.3m. Charges against profit include £5.8m in relation to acquisitions.
Greene King said the first eight weeks of the new financial year has seen like-for-likes in Retail rise 7.1%, while average EBITDA in Pub Partners was up 4.6% and beer volumes were up 2.7%.
Rooney Anand, Greene King chief executive, said: “Our team has once again delivered record results and attractive returns to our shareholders in a difficult environment. We have achieved strong growth and made further strategic progress. All our businesses are building customer loyalty by delivering industry-leading value, service and quality as we strive to be Britain’s best pubs and beer business.
“We are in the middle of an exciting summer for Britain, despite the unpredictable weather, with the Diamond Jubilee, Euro 2012 and with the Olympics still to come. However, looking further ahead, our customers’ spending will continue to be squeezed and concerns remain about job security. Our strategy is tailored for these difficult conditions as we focus on providing ‘everyday treats’ to our customers and delivering sustainable growth in earnings and dividends for our shareholders.”