Half-year figures from Greene King (GNK) flesh-out the positive September update, as an uncharacteristically long-run by England in a major football tournament, coupled with good beer garden weather, saw punters flocking to the pub. Like-for-like sales at the Pub Company segment outstripped the wider ‘wet trade’, coming in 2.7 per cent to the good, while the group’s brewing operations delivered a 7.5 per cent sales increase.
The improved numbers must have been precipitated by more than Harry Kane and the prospect of a suntan, as comparable sales at Pub Company, which comprises around 2,800 pubs, restaurants and hotels, were up 2.9 per cent in the six weeks since the half-year with Christmas bookings well ahead of last year.
The group has had to contend with rising fixed costs and it has also identified significant risks in relation to a potential ‘no deal’ Brexit” ahead of the March deadline. The risks identified are largely specific to Greene King, but the group’s apparent preparedness is rather atypical in the UK corporate sphere if we are to believe Bank of England Governor Mark Carney.
Bloomberg consensus gives adjusted operating profits of £367m for the April 2019 year-end, giving EPS of 62.3p, rising slightly to £368m and 63.5p in FY2020.
| GREENE KING (GNK) | ||||
| ORD PRICE: | 529p | MARKET VALUE: | £ 1.64bn | |
| TOUCH: | 428-529p | 12-MONTH HIGH: | 652p | LOW: 454p |
| DIVIDEND YIELD: | 6.3% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 688p* | NET DEBT: | 95% | |
| Half-year to 14 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 † | 1.03 | 124 | 35.1 | 8.8 |
| 2018 † | 1.05 | 128 | 33.1 | 8.8 |
| % change | +2 | +3 | -6 | - |
| Ex-div: | 06 Dec | |||
| Payment: | 18 Jan | |||
| † 24-week period. *Includes intangible assets of £1.2bn, or 392p a share. | ||||
