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Greene King Interim Results

Greene King has published its interim results for the 24 weeks to 15 October 2017.

Business highlights

  • Further outperformance from Local Pubs, Pub Partners and Brewing & Brands in a challenging first half
  • Strong cost mitigation: on track to deliver £40-45m of cost savings
  • Brand optimisation delivering return on investment over 25%; Fayre & Square to be debranded by year end as part of our plan to reduce our value food exposure
  • Spirit refinancing under way: new facility agreed, bond prepayment announced
  • Pub Company volume trends improved post period end after £10m investment in value, service and quality

Financial summary

  • Pub Company like for like sales -1.4%, Pub Partners LFL net profit +1.5% and Brewing & Brands own-brewed volume +0.3%
  • Operating profit before exceptional and non-underlying items1,2 of £188.4m, -7.5% below last year
  • Strong cash flow and balance sheet supporting attractive and sustainable dividend; dividend per share maintained at 8.8p
  • 4.2x net debt to EBITDA1,2; fixed charge cover 2.3x; securitisation headroom in excess of 30%
  • Group return on capital employed2 of 9.0%, well ahead of weighted average cost of capital

Rooney Anand, chief executive officer:

“The first half was challenging for our managed pubs, but our actions to strengthen performance have produced an improvement since the period end. We have committed additional investment to enhance the customer experience, including being more competitive on price, having more team members available at key times and strengthening local marketing activity. Pub Partners and Brewing & Brands again outperformed the market, generating cash for the group and raising the profile of Greene King.

“We will continue to benefit from our ability to generate significant cost savings and to improve investment returns to over 25% from rebranded pubs. Greene King is a strong, competitive business with industry-leading brands, a strong and flexible balance sheet, a sustainable dividend and an excellent track record of outperforming in challenging conditions. We are adapting our strategy to ensure we continue to sustain our long-term competitiveness, strong cash generation and attractive returns to shareholders.”

¹Adjusted measures exclude the impact of exceptional and non-underlying items as detailed in note 3 of this statement. ² The directors use a number of Alternative Performance Measures (APM) that are considered critical to aid the understanding of the group’s performance.