Summer cheer for pub groups


Cambridges visit Greene King pub

The UK's summer "feel-good" factor has delivered a shot in the arm for the pub industry as Britons toasted the heatwave, birth of Prince George and ongoing sporting success.

Greene King, which has around 2,300 pubs, restaurants and hotels, hailed signs of growing consumer confidence, helped by another celebratory summer season, with sales across its core retail estate up 4.6% in the 18 weeks to September 1.

Comparative earnings at its 1,300 leasehold pubs also rose 2.7%, while sales of its own-brewed Old Speckled Hen ale leapt 7.9% ahead.

Larger rival Punch Taverns also reported an improving picture, with average net income returning to growth over the year across its entire 4,000-strong estate and a 0.4% rise among core pubs in the final quarter to August 17.
Greene King, which also owns the Hungry Horse chain and Loch Fyne seafood restaurants, said its performance was boosted by " the feel-good factor" as takings jumped thanks to the hot summer weather.

The mood was also helped by Prince George's arrival and a raft of British sporting successes, such as Andy Murray's Wimbledon win, Chris Froome's Tour de France victory and Mo Farah at the World Championships in Moscow.

Punch said "clearly the weather has helped", although it also attributed its trading turnaround to self-help measures, such as investment in its pubs, an overhaul of support offered to leasehold partners and new franchise agreements.

It is expecting annual earnings of between £210 million and £220 million, down from £238 million in the previous year, after suffering from tough weather conditions earlier in the year.

The group recently slumped into the red with losses of £16.7 million in the first half as it also counted the cost of servicing its £2.4 billion debt mountain.

Punch , which split from the Spirit managed pubs business in 2011, said it was hopeful of agreeing a "consensual restructuring" after attempts to overhaul and shrink its debt were rejected twice by lenders.

Punch is pencilling in a return to like-for-like net income growth in the core estate of 2,990 pubs in the new financial year, rising to 2% in 2015.

While Greene King shares failed to receive a boost from its feel-good boost, Punch stock rose more than 4%.

Douglas Jack, analyst at Numis Securities, upped his full-year pre-tax profit forecast for Punch by 3% to £50 million after the fourth quarter revival.

© 2013 Press Association