2nd May 2006 15:00
Greene King PLC02 May 2006 2nd May 2006 GREENE KING plc ALL DIVISIONS PERFORMING WELL DEBT REFINANCING IMPROVEs FINANCIAL FLEXIBILITY AND LOWERs INTEREST COSTS Greene King plc is pleased to report positive trading in all four of itsdivisions - Pub Company, Pub Partners, Brewing Company and Belhaven - in the 51weeks to 23 April 2006. Margins have remained strong and the overallperformance is in line with our expectations. Total like-for-like sales in Pub Company were +1.8%. Like for like turnover inPub Partners was +2.1%. Total beer sales by volume were up by 7 %. The salesof Greene King IPA were +4%, Abbot Ale +5% and Old Speckled Hen +9%. The integration of Belhaven into Greene King has run smoothly, and therealisation of our synergy targets is on schedule. Whilst it is still veryearly, we have been pleased with Belhaven's trading since the Scottish smokingban. In the 51 weeks, Belhaven Best volume was up 8.6%. Greene King will be announcing its preliminary results for the full year ended30th April 2006 on 4th July 2006. SECURITISATION In March 2005 Greene King successfully completed its inaugural securitisation,issuing £600m of investment grade bonds backed by just under half of its pubs atthe time. Following the acquisitions of Belhaven Group plc and TD Ridley & SonsLimited in 2005, Greene King has decided to refinance approximately £550m of itsbank and debenture debt via a further issue of bonds. This improves thecompany's financial flexibility and enhances shareholder value by takingadvantage of longer-term, lower-cost bond finance. Whilst our total debt remains unchanged, the further £550m of bond finance willtake the overall outstanding Greene King bond issuance to £1,137m, backed byapproximately 70% of its pubs. The further bond finance has today been pricedat advantageous rates, and the transaction is expected to be completed nextweek, when the funds raised will be used to partially re-pay the group'sexisting loan facilities. The transaction priced at the following levels: Tranche Rating Type Amount Price A3 A FRN £170m Libor + 50bpA4 A Fixed £265m 5.106%B2 BBB FRN £115m Libor + 83bpTotal £550m As with the original bond issue there has been an excellent response frominvestors towards these bonds which are backed by Greene King's trading record,its high-quality freehold pub assets and the flexible structure which allowstransfers of pubs between managed and tenanted formats. The bond finance hasbeen arranged and placed by The Royal Bank of Scotland plc. At the same time as the bond issue, Greene King has finalised the terms ofrefinancing its 7.75% 2027 Greene King plc debenture stock. The £25 milliondebenture is to be redeemed for £34.8 million of cash, reflecting the abovemarket interest rates of the debenture. As a result of the bond issue, there will be an interest saving going forward,of approximately £2.7 million per annum. The refinancing and bond issue willresult in a one-off exceptional charge in the 2007 financial year ofapproximately £6.1 million net of tax as a result of the redemption of thedebenture and the cancellation of fixed rate swaps no longer required due to theissuance of fixed rate bonds. Commenting on both the trading update and the securitisation, Rooney Anand,Chief Executive of Greene King, said: "Trading across the group has been positive and we remain on course to achieve asuccessful outcome to the year. At the same time, we have completed anothersuccessful, innovative financing exercise, achieved at attractive interest ratesfor Greene King. Going forward, the strength and efficiency of our capitalstructure will give us greater flexibility to invest for future growth and toenhance shareholder value." For further information: Greene King plc Rooney Anand, Chief Executive Tel: 01284 763222 Ian Bull, Group Finance Director Financial Dynamics Ben Foster Tel: 020 7831 3113 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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