Industry News

Greene King (LSE: GNK.L - news) , the brewer and pub owner, on Thursday said that recent trading had been strong, partly thanks to sunny weather and increased spending from mortgage borrowers benefiting from lower interest rates.

It reported 5 per cent like-for-like sales growth in its managed pub arm, Greene King Retail, for the eight weeks to June 28, although its leased and tenanted pubs - run by semi-independent publicans - continued to see sales declines.

Sales of its beer brands - excluding Belhaven, which is reported separately - grew by 12 per cent during this period in volume terms.

However, the Suffolk-based group was cautious about assuming that the strong trading would continue, because of lingering worries that unemployment would continue to rise.

Greene King gave the update on recent trading as it announced a drop in full-year profits from £148m to £54m. The profit decline was exacerbated by £64m of exceptional charges, mainly stemming from impairment charges against the accounting value of a relatively small number of pubs.

Stripping out exceptional gains and losses, pre-tax profit fell from £142m to £118.5m, slightly ahead of analysts' expectations and the forecast it had made at the time of the rights issue announced in April.

Sales fell from £961m to £955m, although a 1 per cent sales gain would have been posted if the prior year had not contained a 53rd week of trading.

Greene King shares rose 3 per cent to 424p in early trading.