22nd Oct 2014 07:26
LONDON (Alliance News) - Spirit Pub Co Ltd Wednesday posted a rise in pretax profit and hiked its full year dividend, just days after it recommended an increased takeover bid from rival Greene King PLC.
Spirit's pretax profit in the year to September 30 was GBP110 million, up from GBP60 million a year earlier, as revenue increased to GBP801 million, from GBP758 million.
The group hiked its dividend by 8% to 2.22 pence per share, against 2.05 pence per share last year.
Like-for-like sales in its managed pubs division were up 4.4% the company said, while like-for-like net income in its leased arm rose 4.2% in the period, marking four quarters of consecutive growth for the arm.
Over the course of the year, the group acquired 22 new pubs for its managed division and said it currently has GBP75 million in cash available to fund the expansion of its estate.
"It's been a strong year for Spirit, driven by effective execution of our clear and consistent strategy. Our Managed division continues to outperform the market with its strong portfolio of brands, while our Leased division is delivering market-leading performance and is in growth. We ended the year with a healthy balance sheet and strong earnings and dividend growth, underpinned by good cash generation," said Spirit Chief Executive Officer Mike Tye.
"While the consumer environment remains volatile, we are confident that our customer proposition and sustained focus on delivering hospitality excellence for our guests will provide the necessary firepower to grow market share and continue to deliver value for all our stakeholders," Tye added.
On Monday, Spirit said it was open to recommending an increased takeover offer from FTSE 250-listed rival Greene King. The new deal valued Spirit at around GBP723 million, above the GBP661 million approach Greene King had made a month earlier, which Spirit said undervalued the business and its prospects.
"The board of Spirit has indicated to Greene King that it would be willing to recommend an offer at the level of the revised proposal to Spirit shareholders subject to the satisfactory resolution of the other terms of the offer. Accordingly, the board is in discussions with Greene King in relation to these terms," Spirit said in a statement.
Spirit shares were up 1% to 101.75 pence on Wednesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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