Bury St Edmunds’ Greene King toasts success as profits rise
Spirits are high at Bury St Edmunds brewery and pub group Greene King which has seen pre-tax profits soar by nearly 50 per cent.
The surge in pre-tax profits to £121.3 million for the 24 weeks to October 18 this year compared to £82.6 million for the same period last year comes on the back of the acquisition of rivals Spirit Pub Company.
The brewery, which employs 42,000 people and has more than 3,000 pubs, hotels and restaurants, is also enjoying its new status as the UK’s leading pub hospitality company.
Rooney Anand, Greene King chief executive, said: “It has been a strong first half, with the Greene King business strengthening and significant progress made in the Spirit integration.
“Like-for-like sales growth in Greene King Retail improved during the half and both pub partners and brewing & brands delivered profit growth and margin expansion.”
He said Greene King Retail was the biggest driver of growth with revenue up 6.7 per cent and like-for-like sales up two per cent. Average revenue per pub rose by 3.9 per cent.
Mr Anand said: “We completed the acquisition of Spirit Pub Company and, by combining the best of both companies, made good progress in capturing value from the acquisition and creating the UK’s leading pub hospitality company.”
The company’s interim trading statement - the first figures reflecting the impact of the Spirit acquisition - show that revenue rose over the 24 weeks by 49.2 per cent to £917.7 million - including a £269.3 million contribution from Spirit - compared to £614.9 million for the same period last year.
Mr Anand said there were still challenges ahead.
These include the end of the beer tie that makes pubs managers buy its beer and the impact on profits of the introduction of the national living wage.
He said: “Our people are core to our business and we constantly strive to pay them appropriately for their hard work while maintaining a high level of investment in development and training.
“As an employer of 42,000 people, with half under 25, the introduction of the national living wage will affect our cost base.
“We are confident of being able to mitigate most of this impact and options.”
Mr Anand also said the firm will base its combined retail division at the Spirit office in Burton-upon-Trent but would keep the combined pub partners division, brewing & brands and the company headquarters in Bury St Edmunds.
He said: “This arrangement will ensure that retail is more centrally located, reflecting our national scale and reach in this division, while protecting the heritage and legacy of Greene King by retaining a significant presence in Suffolk.
“We anticipate that the people transition will complete towards the end of the financial year.”