Greene King feels pinch but Marston’s sees profits fatten
The boss of brewing giant Greene King on Thursday warned of “stress” in the dining sector as he revealed a fall in sales and profit, but rival Marston’s shrugged off the worries hanging over pubs to toast full-year growth.
Greene King’s Rooney Anand said: “There is overcapacity in the eating-out and casual-dining sector. We are starting to see the first signs of stress [in the wider value food market].”
The FTSE 250 firm said consumers continued to tighten their belts in the 24 weeks to October 15, and that competitor discounting increased.
Like rivals, the company is also grappling with higher wages and business rates. It faces £60 million of cost headwinds over the full year.
It posted a 1.2% revenue drop to £1 billion, with sales at pubs open for a year or more down 1.4%. Underlying pre-tax profit decreased 8% to £127.9 million.
Plans to improve trading include investing £10 million to boost marketing and staff numbers for peak times, and introducing more promotions to lower prices.
Shares in Greene King fell 16.5p to 523.95p.
In contrast, the City piled into pubs operator Marston’s, pushing the shares up 12.16p to 116.96p.
The maker of Wainwright beers said sales at food-led pubs open for a year or more rose 0.9% in the year to September 30. Comparable sales at drink-led boozers increased 1.6%.
Total revenues jumped 8% to £1 billion and pre-tax profits increased 24% to £100.3 million.
Ralph Findlay, the boss of Marston’s, said the firm benefited from a £55 million deal in May to buy the brewing arm of Bombardier ale maker Charles Wells Group. Customers also enjoyed new Pizza Kitchen divisions in a number of pubs.
Findlay said: “There is consumer caution, but I don’t think people are stopping going-out plans.”
He added: “We’ve probably been the most disciplined in the sector about not dropping prices.”
