England football fans aren’t the only ones hoping for a repeat of 1966. Greene King (GNK) is set for the usual quadrennial boost from the FIFA World Cup – and the longer England can stay in the mix, so much the better. With 59 per cent of punters expected to head to the pub to watch the tournament, it could help the pub company division recover from a 2.7 per cent decline in sales, and a 13 per cent fall in operating profit in the year to April. The early signs are encouraging, with pub company like-for-like sales up 2.2 per cent during the first eight weeks of the current financial year, aided by a step-up in the number of sporting fixtures and fair weather.
Chief executive Rooney Anand said it was a year of “unprecedented cost inflation” due to the National Living Wage, sugar tax, utility taxes and business rates, exacerbated by weak consumer confidence and increased competition. Around £44m was saved over the period from the pub group’s cost mitigation programme and synergies from the 2015 Spirit acquisition. Overall, cash profit fell 7.2 per cent to £487m, while the operating margin decreased 1.5 percentage points to 17.1 per cent.
Analysts at Peel Hunt expect pre-tax profit of £247m in the year to April 2019, giving EPS of 64.6p, compared with £243m and 62.7p in FY2018.
| GREENE KING (GNK) | ||||
| ORD PRICE: | 596p | MARKET VALUE: | £1.85bn | |
| TOUCH: | 595-597p | 12-MONTH HIGH: | 703p | LOW: 454p |
| DIVIDEND YIELD: | 5.6% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 664p* | NET DEBT: | 99% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 1.30 | 105 | 44.2 | 28.40 |
| 2015 | 1.32 | 118 | 40.9 | 29.75 |
| 2016 | 2.07 | 190 | 64.4 | 32.05 |
| 2017 | 2.22 | 185 | 49.0 | 33.20 |
| 2018 | 2.18 | 198 | 52.4 | 33.20 |
| % change | -2 | +7 | +7 | - |
| Ex-div: | 2 Aug | |||
| Payment: | 14 Sep | |||
| *Includes £1.2bn of intangible assets, or 392p a share | ||||
