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Thu 12th Apr 2018 - Update: Greene King trading, City Pub Group results
Greene King has reported like-for-like sales down 1.8% in first 49 weeks: Greene King has issued a pre-close trading statement in which it reported like for-likes down 1.8% in its first 49 weeks of the financial year. The company stated: “Pub Company like-for-like sales for the 49 weeks to 8 April were minus 1.8%. The weather over the last 12 weeks impacted trading, particularly in our destination food-led pubs, and on an underlying basis, excluding the impact of snow, like-for-like sales in the year-to-date were minus 1.2%. Both drink and accommodation like-for-like sales were ahead of last year. Trading over Easter was strong with like-for-like sales up 2.8% against the Easter weekend last year, helped by strong sporting fixtures, especially football and boxing. The targeted £10m investment we made in the second half of the year to strengthen our value for money, customer service and quality is starting to positively impact on trading, despite the continued challenging market backdrop. We continue to reposition Pub Company to drive growth going forward; we will complete the exit from Fayre & Square by the financial year end; we opened nine new pubs over the year; and we invested core and brand conversion capex in 292 pubs.  After 48 weeks, like-for-like net profit in Pub Partners was minus 0.3% while own-brewed volumes in Brewing & Brands were minus 0.7%, ahead of the UK ale market at minus 3.1%. We remain on track to deliver targeted cost savings of £40-45m, we will have spent c. £160m in the full year in ensuring our estate remains well invested and our disposal proceeds are likely to be ahead of expectations at c. £120m following the sale of three high value leasehold pubs. As a result, we expect full year profit before tax and exceptionals to be in the range of £240-245m. With our high quality portfolio of pubs, excellent team, strong balance sheet and sustainable dividend, we remain well placed to withstand the external market challenges and deliver long-term value to our shareholders.”

City Pub Group reports sales and profit growth: The City Pub Group has reported sales rose 35% to £37.4m (2016: £27.8m) in the 53 weeks ended 31 December 2017. The group operates a predominately freehold estate of 34 wet-led pubs in southern England and Wales. Five additional sites acquired and a further two are to be completed imminently, bringing the size of the estate to 41. It reported like for like sales growth of 3.8%, driven by good growth in drink and accommodation. Adjusted Ebitda was up 51% to £6.1 million (2016: £4.1 million). Adjusted profit before tax was up 102% to £3.2 million (2016: £1.6 million). A further seven openings have already been earmarked for 2018 – additional sites have been identified and are in legals. Dividends increased by 50% on 2016 to 2.25p per share and the group’s innovative Profit Share Scheme saw eligible Employees rewarded with a payment of £750 each as a result of the group’s strong financial performance. Clive Watson, executive chairman of The City Pub Group, said: “2017 was a pivotal year in the evolution of the business. Not only did we combine the two divisions under one roof, but we made the important step of listing on AIM. We have also continued to expand our high-quality drink-led estate which has significantly increased revenue and group Ebitda. Our increased dividend signals the progress made, our strong financial performance and our confidence for the future. The momentum from 2017 has continued into the current financial year and we have already earmarked 7 new pub openings for this year. We are on course to meet our target of doubling the size of the estate to around 65 pubs by mid-2021. We have a great head office team in place to deliver on this goal. The sector continues to experience a number of well-trailed headwinds but we are positioned to meet these challenges and with our robust balance sheet, well invested estate and strong cash generation, we are confident of delivering continued strong progress and meeting our expectations for the year as a whole.” Watson added: “For the first 14 weeks of the year, total sales were up 22% on prior year with 34 sites open and trading. The snow in the first quarter adversely impacted trading for a short period, however with key sporting events, particularly the World Cup football tournament in June, the opening of the pubs already earmarked for 2018 and a strong acquisition pipeline, we are confident of delivering continued strong progress and meeting expectations for the year as a whole. The last six months have seen us complete the initial part of our journey and start our second stage. In common with all in the hospitality industry, there are challenges such as rising employee costs, business rates increase and uncertainty around Brexit. Increasing sales, scale and efficiency will mitigate the bulk of these.” 

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