Soaring Greene King raises a glass to summer
GREENE KING was the biggest gainer in the FTSE 350 index yesterday after it hailed a rise in sales on the back of one of the hottest summers on record and England’s performance in the World Cup.
The pub group’s revenues in the 18 weeks to Sept 2 were up 2.8pc on a like-forlike basis, excluding the impact of newly opened and closed pubs, which it said was ahead of 1.2pc growth in the market.
It sold 3.7m pints during England’s seven matches in Russia and saw like-for-like sales soar 61pc as punters watched the team lose a semi-final against Croatia.
The strong performance led analysts at Peel Hunt and Canaccord to upgrade their rating of Greene King’s shares to “buy”. That helped them surge 7.5pc to 510.6p yesterday.
AJ Bell’s Russ Mould said that the company’s strong performance would have reassured those who had been bearishly betting against the company over the summer. Its shares are still down around 8pc since the start of the year. He added: “Greene King has finally managed to grab the market’s attention after a long period in the doldrums. Its real test is to prove that positive trading momentum can be sustained.”
Sales were particularly strong in Greene King’s own managed pubs, up 5.5pc.
Its Pub Partners arm, which leases pubs to independent tenants, had a 0.4pc drop in like-for-like net profit, however, “impacted by the timing of higher overhead costs which we expect to balance out over the year”.
The FTSE 250 company, which is in the middle of a cost-cutting drive, said it was on course to sell off between 100 and 110 pubs this year and will open about nine new ones.