Pub group Greene King continues to outperform most of its peers and offers a tasty dividend yield to boot. In the first half, not only did it report continued like-for-like growth from its own-managed pubs, with a 3.8 per cent increase, but its tenanted division is also growing on a like-for-like basis - profit there were up 0.4 per cent.
The group reported 10.1 per cent profit growth from its Scotland-based Belhaven estate, which generates about 15 per cent of operating profits. New plans to fully integrate the business should save £1m a year. Despite a declining beer market, the brewing business boosted sales, and profits there grew 3.1 per cent. Like many of its peers, Greene King is currently focused on expansion and decent progress continues to be made towards the aim of 200 new sites, with 17 added in the half, which means it is about one third of the way to its target.
First-half growth was stronger than expected and the dividend was increased by more than brokers had predicted. Subject to revision following these results, broker Deutsche Bank forecasts full-year pre-tax profit of £133m, EPS of 46.4p and a dividend of 23.2p (from £121m and 43p/21.5p in 2010).
| Greene King (GNK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 471p | MARKET VALUE: | £1.02bn | |
| TOUCH: | 471-471p | 12-MONTH HIGH: | 484p | LOW: 373p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 412p* | NET DEBT: | 148% | |
| Half-year to 17 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 465 | 51.2 | 18.2 | 5.90 |
| 2010 | 484 | 60.0 | 24.2 | 6.30 |
| % change | +4 | +17 | +33 | +7 |
Ex-div:22 Dec Payment:28 Jan *Includes intangible assets of £780m, or 314p a share | ||||
