, one of Britain’s best-known brewers and pub operators, turned in a 6.8% rise in pre-tax profit in the year to 29 April 2018, it announced today.
But the group preferred to use an adjusted measure that recorded an 11.2% decline in profit before tax to £43 million.
The adjusted figure excludes exceptional and non-underlying items such as legal and professional fees, impairment of property and plant and profits on sales of property and equipment.
Good progress reported
Perhaps influenced by the firm’s self-effacing take on its results, Greene King shares dropped 32.9p, or 5.15%, in early trading to 605.7p.
The full-year dividend is unchanged at 33.2p a share, despite earnings per share, on Greene King’s adjusted measure, falling 11.4% to 62.7p. Unadjusted earnings per share increased by 6.9% to 52.4p.
The third leg of the business, brewing and brands, saw revenue rise 7.4% to £215.1 million.
Rooney Anand, chief executive officer, said: “We made good progress improving the performance of the business during the second half of the year, despite a challenging trading environment. Our investment to improve the customer experience in our pubs and the focus on our strategic priorities are beginning to pay off.
Core capital spending during the year increased by £6.3 million from £126 million the previous year to £132.3 million, while net debt was cut by £42.2 million from £2,074.5 million to £2,032.3 million.
Consumer confidence “remains fragile”
Greene King’s history stretches back to 1799 and the firm is based in Bury St Edmunds in Suffolk. It operates 2,855 pubs, restaurants and hotels in Britain, of which the best-known brands include Chef & Brewer, Hungry Horse and Farmhouse Inns.
Of the beers it brews, among the most popular are Greene King IPA, Abbot Ale and Belhaven Best.
Philip Yea, Greene King’s chairman, said: “Greene King is a strong business with an excellent track record of delivery and resilience in tough market conditions. This has been a challenging financial year with pressures on both revenue and margins as consumer confidence remains fragile.”
He touched also on “a number of industry-specific input costs”, thought to include labour costs, which have been raised by the increase in the National Minimum Wage. Mr Yea added: “We are pleased with the most recent trading performance although we are aware that we have benefited from better weather and sporting events. Building pub brands that customers admire remains central to our strategy and we are focused on providing the customer with offers that deliver compelling value, service and quality.”