28th Jan 2009 07:00
PRESS RELEASE
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28 January 2009 |
GREENE KING plc
INTERIM MANAGEMENT STATEMENT
Greene King announces its Interim Management Statement for the 38 weeks to 25 January 2009.
As highlighted at our Interim Results in December, Christmas trading generally improved, particularly in our Retail division.
After 38 weeks, Greene King Retail LFL sales are -1.1% and over the last 8 weeks, LFL sales have been +2.4%, as we continue to maintain a fine balance between delivering better value to our customers and withstanding the continued cost pressures that the business is having to absorb. Key drivers of our improved LFL sales performance include strong Christmas bookings, further improvement in Hungry Horse and targeted investment in sports-led satellite TV, particularly within Local Pubs.
Underlying profit performance in our tenanted business, Pub Partners, has softened in the last two months as we anticipated. Underlying LFL profits for the year-to-date are -5.3%, driven in the main by a decline in beer volumes and increased levels of licensee support. However, licensee 'health measures' remain largely unchanged. Our re-organisation of the division into Core and Independent pubs will play an important role in adapting our business to face the most extreme trading conditions we and our licensees have seen.
Brewing Company own-brewed volumes are -1.5% after 38 weeks with the off-trade continuing to out-perform the on-trade. The most recent data from AC Nielsen confirms that we have, for the first time, and without the impact of any acquisitions, attained the position as the No.1 brewer in the Premium Bottled Ale segment of the off-trade. This follows a strong Christmas trading performance, notably for Old Speckled Hen, the UK's No.1 premium bottled ale brand.
Belhaven continues to perform well, with year-to-date managed LFL sales +2.4% and beer volumes well ahead of the Scottish market. As we highlighted at the Interims, there are clear signs that the economic slowdown is beginning to have an impact in Scotland and this is affecting our Scottish licensees and therefore, our Tenanted volumes. We have however, pro-actively supported our licensees and, as is the case south of the border, the 'vital signs' of licensee health remain stable.
We continue to reduce our net debt position and invest in our businesses whilst ensuring we generate net cash, with no refinancing required before April 2012 on either securitisation or bank debt. Our investment in capital expenditure continues, with a further c. £25m to be invested over the second half of this fiscal year, as we carefully balance accretive investment in our pubs, reducing our debt levels and providing returns for our shareholders. Cash generation and our balance sheet position remain sound, and in line with expectations.
We are successfully disposing of non-core assets, and in the 38 weeks to date, 90 disposals of properties and excess land have been completed, achieving proceeds, ahead of net book value, of £35m. Although the rate of disposal is likely to slow, we still anticipate further disposals being made throughout 2009.
The anticipated post-New Year slowdown has not, as yet, taken place, but we remain very cautious as to trading prospects for 2009, and we anticipate that the outlook for the rest of the year will remain very challenging.
However, Greene King is well placed to cope with a prolonged consumer downturn, particularly given the steps being taken to further strengthen each element of our business, our sound balance sheet, and the prudent and firm approach taken to cost control, cash generation and debt repayment. Overall, our trading and financial position remains in line with our expectations.
For further information:
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Greene King plc |
Rooney Anand, Chief Executive Ian Bull, Group Finance Director |
Tel: 01284 763222 |
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Financial Dynamics |
Ben Foster
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Tel: 0207 831 3113 |
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