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Greene King shows signs of turnaround

The pub group is beginning to show signs that its turnaround strategy is going according to plan
April 16, 2018

The double-digit move up in the share price of Greene King (GNK) after the release of a pre-close trading update suggests the market has renewed faith in the pub group’s turnaround strategy. The exit from Fayre & Square will be complete by the financial year-end, the group is on track to save between £40m and £45m in costs, and proceeds from the disposal of some pubs are likely to be ahead of expectations at around £120m, and when combined with the £160m spent on investing in existing locations, pre-tax profits should come in between £240m and £245m.

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Trading in the 49 weeks to April was mixed, due especially to the impact of snow. An increase in sales from drinks and accommodation were not enough to offset the decline in food, so group like-for-like revenue fell 1.8 per cent. But sales over Easter weekend were 2.8 per cent ahead of last year, and the £10m spent on improving the customer experience is starting to have a positive effect.