Buoyant Belhaven bucks sale trends

Published on Wednesday 27 January 2010 21:00

SALES of Belhaven Best – the star performer in parent group Greene King's sprawling beer portfolio – have continued to defy the downturn in Scotland's ale market, rising 14.9 per cent rise since May.

Retail like-for-like sales at the brewing group's Belhaven pubs were up 7.4 per cent in the 38 weeks to 24 January. Although the figure marks a slowdown in growth since the interim stage in December – when Greene King reported a 10.1 per cent increase – the sales data was higher than analysts' estimates.

The recent extreme weather was blamed for the slowdown in sales, which was reflected across the group's managed pubs division, which includes brands such as Old English Inns and the Hungry Horse chain.

But Greene King said that Dunbar-based Belhaven – which it bought in 2005 for 187 million – remained "on course for another successful year".

Suffolk-based Greene King yesterday said it was buying a further eight pubs from Punch Taverns for 15.9m, including the Merlin in Edinburgh.

The group – which acquired the Loch Fyne chain of seafood restaurants in 2007 for 68m – has been on a buying spree in recent months, spending 79m of the 207m its raised in April's rights issue on 26 public houses.

This included paying rival Mitchells & Butlers 12.7m for seven premises in Edinburgh, Glasgow, Aberdeen, Stirling and St Andrews during December.

In Tuesday's trading update, the brewer said: "Whilst the UK consumer outlook is still uncertain, we are confident that we will meet the board's expectations for this financial year." The company said that all of its businesses were winning market share, allowing it to "deliver profitable growth despite the challenging conditions".

Across the UK, Greene King retail like-for-like sales were up by 4.3 per cent in the 38 weeks to 24 January, having slowed from 5 per cent at the 35-week mark.

But the company warned: "It is expected that total like-for-like sales growth will moderate through the rest of the financial year due to ongoing tough comparatives and the VAT rise." It noted improving trends in its tenanted pubs, helped by easier comparisons and stronger beer sales due to price support for licensees.

Average earnings per pub have been just 0.8 per cent lower since 18 October, although they are 4.9 per cent down for the first 36 weeks of the financial year.

Greene King said the division was helped by the off-loading of its weaker pubs and the improving "health" of licensees.

The firm meanwhile hailed another good showing from its Old Speckled Hen and Abbot Ale brewing business, which weathered the snow and ice to post a 7.2 per cent rise in volumes after 38 weeks.