Greene King posts rise in full-year profits

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PUB operator Greene King looks poised to shake off the winter’s prolonged deep freeze and squeezed consumer climate by posting a rise in full-year profits and sales.

The group – which owns the Belhaven brewery in Dunbar and a site in Suffolk – has already guided investors to expect a 2.2 per cent increase in underlying retail sales for the year to 30 April.

Heavy snowfall during the winter meant the business endured a slow second half, but that followed a “very strong” initial six months.

Greene King – which brews beers including Abbot Ale, Old Speckled Hen and an eponymous India pale ale operates about 2,300 hotels, pubs and restaurants, including chains such as Hungry Horse, Loch Fyne Restaurants and Old English Inns.

The firm is forecast to post pre-tax profits of £161.2 million for the year, up from £152m, when it reports results on Thursday.

In line with other pubs groups, the brewer has focused on food sales and sold 700,000 meals over the four-day Easter period.

But Numis Securities analyst Douglas Jack warned that the group faces a tough year ahead. “Early 2013-14 trading should benefit from about 20 per cent less rainfall year-on-year, but is up against tough comparatives due to last year’s Diamond Jubilee and Euro 2012,” he said.

In a preview note ahead of the full-year result, Jack cut its recommendation from “add” to “hold” following ­“recent strength” for the stock.

Focusing on its managed pubs, Jack added: “We estimate margins rose 35 basis points in the second half, slowing due to lower like-for-like sales.

“Overall margin growth reflects higher gross margins, improved labour productivity and tight cost control.”