Belhaven raises glass to strong year

Published on Wednesday 28 April 2010 20:53

BREWING and pubs business Belhaven delivered another sparkling performance yesterday, even as parent company Greene King reported a sales slowdown and warned of "fragile" consumer confidence.

• Rooney Anand from Greene King (left) and Stuart Ross from Belhaven. Picture: PA

The historic Scots brewer, which was founded near Dunbar in 1719, has proved its worth to the Suffolk-based group since 2005's 187 million takeover.

Yesterday's trading update – covering the 49 weeks to 11 April – revealed "industry-leading" like-for-like sales growth of 5.6 per cent at the Belhaven managed pubs estate.

The figure compares with growth of 3.6 per cent at the Greene King retail division south of the Border, down from 4.3 per cent after 38 weeks of the year.

Meanwhile, sales volumes of Belhaven's most popular product – Belhaven Best draught ale – rose 15.4 per cent during the 49-week period, down slightly on the 15.7 per cent reported for the first half.

Greene King, whose core beer brands include Old Speckled Hen, told investors: "We are still cautious for the remainder of 2010 as election uncertainty, rising taxes, public sector cutbacks and fragile consumer confidence may limit spending."

The group said it was confident of meeting profit targets for the year.

Panmure Gordon analyst Simon French said the trading update was "mixed" with the tenanted business showing the healthiest signs.

"Like-for-like sales growth in managed pubs has moderated as expected but beer volume declines are greater than anticipated."

The City is looking for full-year profits of about 122m.

Greene King also reported stronger-than-expected sales from recent acquisitions after spending 86m – almost half of last year's rights issue proceeds – on bolstering its estate and buying back debt cheaply.

The group said it was confident of driving further growth through acquisitions this year while maintaining financial discipline.

At the time of its first-half results in December, the firm vowed to continue bolstering its Scottish pubs estate.

Following a string of acquisitions last year, it currently has more than 320 watering holes north of the Border.

Group chief executive Rooney Anand said at the time: "Since becoming part of Greene King, we haven't changed any of the really good bits of the Belhaven formula but we have invested money to expand the estate."

Yesterday's trading statement also highlighted signs of stabilisation at Greene King's tenanted pubs business. The cost of support measures to struggling licensees will now be below 6m for the current financial year, compared to the 6m to 6.5m previously guided by the firm.

Last week, it emerged that Punch Taverns, the biggest pub owner operating in Scotland, was providing a lifeline of 2m a month to its struggling tenants.