Record Festive Sales Support Resilient Greene King
LONDON -- Shares of Greene King gained 3 pence to 652 pence during early London trade this morning after the pub and restaurant company said its underlying retail sales improved by 3% during the six weeks to Jan. 6.
Greene King, which operates about 2,300 outlets and counts Hungry Horse and Old English Inns among its brands, said it sold 448,000 Christmas dinners during December and registered sales of 2.7 million pounds on Christmas Day.
The FTSE 250 business added that its total retail sales had advanced by almost 10% during the 36 weeks to Jan. 6. Retail margins had also remained "strong" during that time, although volumes of the firm's own-brewed beer were down 2%.
Profits at the group's tenanted pubs improved 4% as well.
Rooney Anand, Greene King's chief executive, said:
Our strong momentum has been maintained over the last six weeks. We achieved record sales through Christmas and the New Year as our teams once again delivered excellent value, service and quality to our customers.
Pubs continue to play a vital role for customers, families and communities across the U.K. during the festive period, especially in this difficult financial environment. We once again achieved record Christmas bookings and strong like-for-like sales growth across Christmas and the New Year.
This morning's statement ought to reassure Greene King's investors and underpin modest profit and dividend growth for the current year.
Prior to today, City experts that followed Greene King were expecting current-year earnings to advance 6% to 56 pence per share and the dividend to gain 5% to 26 pence per share. The projections equate to a P/E of 11.6 and a yield of 4%.
The present rating looks quite fair, especially as Greene King's dividend has inched higher every year throughout the banking crash and subsequent recession.
Indeed, such dividend resilience could make Greene King a possibility for Neil Woodford, the legendary fund manager whose blue chip income portfolios have thrashed the FTSE during the five, 10, and 15 years to October 2012.
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