Comment: Greene King sales lose out on one for the road

Martin Flanagan
Martin Flanagan
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AN EARLY sign that Scotland’s tougher new drink-drive alcohol limits have resonated with the public. Greene King, soon to be Britain’s third biggest pubs business following its takeover of Spirit, has said trading in Scotland was “soft” in the six weeks to 11 January.

It is unlikely to be coincidence that the more muted performance came after the Scottish Government introduced its more rigorous drink-drive limits in early December.

Holyrood introduced a limit of 50mg of alcohol in 100ml of blood, compared to the higher 80mg of alcohol limit that has been retained in the rest of the UK. It looks as if drivers north of the Border are being more conservative in how much they drink.

Greene King’s same-floorspace sales would have edged up 0.6 per cent over the period, excluding Scotland, but the Scottish shunt meant that the group just trod water on revenues compared with last year.

The performance improved somewhat over Christmas and New Year, with sales up 2 per cent, but that was against very strong growth of 6.4 per cent in the same period last time.

It could be that the Scottish effect will have a permanent drag effect on pub and brewing groups – unfortunate for them commercially, but undoubtedly a wider boon socially.

Greene King’s latest sales figures are pretty pedestrian, but it is far from alone in that against a backdrop of continuing consumer caution and about one in six British pubs closing in the past decade or so.

It is likely to mean the investment case for Rooney Anand’s group will hinge more than ever on the strategic and synergistic case for his takeover of Spirt (formerly of the Punch Taverns drinking parish).

By contrast, on the organic growth front, even well-run businesses like Greene King cannot push sales uphill in a less than benign trading environment.

A gentlemen’s excuse me at Clydesdale Bank

Well, fancy. Clydesdale Bank has got a new chief executive less than a fortnight after announcing that veteran David Thorburn was stepping down following nearly four years in charge, and that the group’s search for a successor was “well under way”.

I’ll say it was. One might suspect that successor David Duffy – poached by Clydesdale parent National Australia Bank from Allied Irish Banks (AIB) after he has impressively dug the Irish group out of the mire of the financial crash – had all but signed up on the dotted line at the time of Thorburn’s resignation announcement. And they say that change happens fast in the world of premiership football management…

To be fair, National Australia Bank cannot get shot of its UK operations, also embracing Yorkshire Bank, fast enough. It has scars.

This impetus may be a reaction to National Australia Bank dithering over a UK decision for years, but also because it is considering a sale or flotation of Clydesdale by the end of the year. You want the new top team with their feet well under the table before assessing investor interest in a float.

Duffy will use his impressive turnaround of AIB as good experience for deciding what to cut and what to keep at a transitional Clydesdale (sometimes it seems t’was ever thus), cut adrift from the Aussie mothership.

He benefits from Thorburn having done much of the heavy lifting already – racking up major financial provisions for the mis-selling of PPI and interest hedging products for small businesses.

Managing more change, however, looks to be the job description from an National Australia Bank spiritually in the Glasgow airport departure lounge.

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