Greene King's third quarter sales boosted by festive season

The FTSE 250 pub operator and brewer said on Wednesday that for the 40 weeks to 7 February 2016, Greene King Retail like-for-like sales were up 2.2%, with a 5% increase in sales over the two Christmas weeks.

Spirit Managed life-for-like sales also rose 1.1% for the period, with Christmas sales up 5.2%.

Like-for-like net income at Pub Partners was up 2.5%, while volumes of its own-brewed products frothed up 3.9% driven by Greene King IPA and Old Speckled Hen.

Overall, combined retail sales were up 67% after 40 weeks due to the acquisition of Spirit seven weeks into the period, with overall growth of 6% at Greene King.

The company said it achieved record sales of £6.8m on Christmas Day in the combined retail estate, led by food purchases.

It also revealed over the Christmas and New Year weeks, Prosecco volumes were up 69% while Premium Gin grew 77%.

At New Year a record 4,447 drinks per minute were sold in the last hour of 2015.

Greene King said despite the current global economic uncertainty, its expectations for the full year are unchanged. The company remains confident it will deliver further value by continuing to develop and enhance the existing Greene King business while integrating Spirit.

Chief executive Rooney Anand said it was a strong performance, with all divisions trading well during the festive period.

“Our positive trading results are a testament to the hard work and dedication of our teams who gave our guests great experiences, with value, service and quality central to our offer.”

He also said the Spirit integration is progressing, with encouraging signs from rebranded trial sites and progress in efficiencies across the business.

“Our focus remains on the development and continuous enhancement of our core Greene King business while successfully integrating Spirit, to create the UK's leading pub company."

Hargreaves Lansdown's head of equity research Steve Clayton said it looks like a positive start for the newly enlarged group.

"Greene King has a great track record of dividend growth and the Spirit deal appears to be sowing the seeds for this to continue a while longer, with the group using the boost to earnings to improve dividend cover, whilst still paying an inflation-busting 6% increase to shareholders at the interim stage."

He noted the acquisition of Spirit has given the group a step-change in scale.

"[It has] increased the exposure to managed houses and the South of the country, including the fabulous Taylor Walker estate in London.

"Managed pub numbers have increased from 1,064 to 1,548 as a result of the deal. The group is thus ever more exposed to casual dining, which is a market with a strong growth record as Britons eat fewer meals in the home."

Clayton said growth prospects "look solid in a still improving UK economy".

Shares in Greene King were up 28p (3.36%) to 862.50 at 0947 GMT.