Belhaven boss Venters' key role at Greene King

Pubs group Greene King is to "fully integrate" the historic Belhaven business it bought five years ago for almost £190 million in a move that will hand a wider role to the Scots brewer's boss.

• Belhaven's managing director Euan Venters will head up the combined brewing operations, based in Dunbar and overseeing the Greene King brewery in Suffolk Picture: Tony Marsh

News of the "streamlining" plan, which will trigger an additional cost saving of 1m-a-year, came as the firm hailed a record first-half performance for Dunbar-based Belhaven.

Greene King also reported a better-than-expected 17 per cent rise in group pre-tax profit and said it was paying an increased dividend - marking it out from rivals such as Punch Taverns and Mitchells & Butlers who have scrapped shareholder payouts in favour of paying down debt.

Chief executive Rooney Anand stressed the company was making the structural changes "from a position of strength, not from a position of being on the back foot".

Under the shake-up, it will merge the Greene King and Belhaven brewing operations into a single business, which will be headed by Belhaven's current managing director, Euan Venters.

He will oversee a portfolio of ale brands, including the best-selling Belhaven Best, Old Speckled Hen and Abbot Ale.

The two breweries, in Dunbar and Bury St Edmunds, will be retained, while Belhaven's retail and tenanted operations will be folded into the respective group functions.

Rooney said: "We are very keen to maintain a distinctly Scottish feel to the Belhaven business. As far as customers are concerned, it will be entirely business as usual.

"There will be no material change to employment at Belhaven - none at shop floor and junior management level, only changes at senior level."

It is understood that Venters will be based in East Lothian and spend two or three days a week in Bury St Edmunds.

Belhaven, which was founded just outside Dunbar in 1719, has proved its worth to the Suffolk-based group since 2005's 187m takeover.

Yesterday's interim results revealed a 10 per cent hike in operating profits to 17.5m as revenues rose almost 6 per cent to 76.4m. Volume growth of Belhaven Best was 5.5 per cent.

Across the group as a whole, pre-tax profits hit 73.1m, up from 62.4m a year earlier.

Investors will pocket a dividend of 6.3p a share, a rise of 6.8 per cent.

Deutsche Bank analyst Geof Collyer said: "The market should respond positively to the increase in the dividend as Greene King is the only major pub group to maintain and grow its dividend through recession."

The broker has a "buy" rating on the shares as does Bank of America Merrill Lynch.

It noted yesterday: "The Belhaven streamlining exercise should generate annualised cost savings of 1m and within brewing there is continued investment in the key leading ale brands."

Rooney said Belhaven was one of the few breweries of any scale left in Scotland and the business had done "fantastically well" since the acquisition.

"The business is on track to report record profits in its final year as a separate entity in Greene King," he added.

The group revealed plans in July to expand its overall retail business - its managed pubs - and reduce its tenanted sites over the next three to five years.

Greene King, which currently operates 891 pubs and more than 1,500 tenanted or leased sites, said it remained on track to hit its targets.

The firm reported strong sales growth at its Hungry Horse chain - up 10 per cent on a like-for-like basis - while restaurant business Loch Fyne was "marginally down" in the period.

KBC Peel Hunt upgraded its full-year pre-tax profit forecast by 2 per cent to 137m and reiterated its "buy" recommendation.