The British public has not lost its appetite for reasonably priced, but good quality pub food, as demonstrated by a solid year-end trading update from pub operator Greene King (GNK). Like-for-like sales grew by 2.2 per cent, despite what has been a difficult, weather-disrupted second half for pub companies. The resilience of trading is reflected in the sustained rise in the company's share price this year, which has started to squeeze the dividend yield for income seekers.
Underlying food sales were 2.7 per cent higher compared with the same period last year and there was overall sales growth in every month apart from March.
Greene King also said the programme to reduce the size of its tenanted estate will continue, with the expected disposal of about 108 pubs to leave it with just over 1,200 tenanted establishments. Cash profits in the tenanted estate are essentially flat, although management hopes to improve the earnings quality of the remaining properties. By the same token, Greene King has continued to expand its directly-managed estate by adding 33 premises to take the portfolio up to 987 pubs. The company announces its preliminary results on 27 June.
