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Greene King Plc

Greene King PLC ‘business delivered good results last year’

Greene King PLC (LON: GNK) has today provided preliminary results for the 52 weeks to the 28th April 2019.


Profit growth through strong LFL sales and ongoing cost mitigation programme

· Pub Company like-for-like (LFL) sales ahead of the market at +2.9%, driven by effective investments in value, service and quality (VSQ), our four core brand focus and boosted by the good weather and successful World Cup

· Further improvements made in TripAdvisor and Net Promoter Scores (NPS)

· Pub Company operating margin flat year on year at 15.2%

· Pub Partners LFL net income +1.5% and LFL net profit -0.3%; Brewing & Brands revenue up 5.8%

· £35m mitigation achieved, limiting cost inflation to £14m; adjusted profit before tax1,2 +1.6% to £246.9m

Strong operating cash flow covers debt repayment, core capex and dividends

· Net debt to EBITDA1,2 reduced to 4.0x; targeting continued deleveraging

· Spirit debenture 51% repaid since F17, reducing cost and increasing flexibility of our debt; Greene King securitisation tapped for £250m at 3.6%

· Consistent five to six year capex programme delivering returns of over 30%

· Dividend per share of 33.2p; long-term track record of attractive, sustainable dividend

Clear near-term priorities and ongoing cost mitigation support confidence in full year

· Trading over the first eight weeks was impacted by the poor weather

· Clear near-term priorities in place to drive sales and efficiencies

· Ongoing mitigation programme to limit net cost inflation to £10-20m in F20

· Further progress made refinancing Spirit debenture since start of new financial year

Nick Mackenzie, Greene King PLC chief executive said,

“Greene King is a great business with a rich heritage, a high-quality estate, a strong portfolio of brands and 38,000 talented team members. Just two months into the job, I have been struck by the amazing pride and passion that our team members have for Greene King and I want to thank them for their continued dedication to providing great experiences for our customers and supporting local communities.

“The business delivered good results last year, regaining trading momentum in Pub Company and returning to market outperformance while fulfilling a strong cost mitigation programme and making further progress refinancing the Spirit debenture. The existing strategy we have in place has led the business through challenging times. I am looking forward to building on Greene King’s strong foundations with a focus on innovation, on developing our people and on customer service to further enhance our brands and deliver sustainable growth for our shareholders.”

52 weeksF19F18YOY Change
Total revenue£2,216.9m£2,176.7m1.8%
·      Pub Company£1,799.2m£1,767.7m1.8%
·      Pub Partners£190.1m£193.9m-2.0%
·      Brewing & Brands£227.6m£215.1m5.8%
Group EBITDA1£482.0m£486.6m-0.9%
Group operating profit before exceptional and non-underlying items1£368.2m£373.1m-1.3%
·      Pub Company£272.9m£268.2m1.8%
·      Pub Partners£87.1m£91.4m-4.7%
·      Brewing & Brands£27.4m£30.7m-10.7%
Group profit before tax and exceptional and non-underlying items1£246.9m£243.0m1.6%
Basic EPS338.9p59.1p-34.2%
Adjusted basic EPS164.5p62.7p2.9%
Dividend per share433.2p33.2pflat
Core capital expenditure2£119.1m£132.3m-£13.2m
Net debt£1,943.3m£2,032.3m -£89.0m
Net cash flow from operations£302.7m£265.8m£36.9m
Free cash flow2£86.1m£89.9m-£3.8m

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