Greene King (GNK) shares fell as much as 7 per cent following a pre-close trading update that revealed a slowdown in like-for-like sales over the last 16 weeks of its financial year.
The pub group enjoyed the Easter weekend. Like-for-like sales were 4.6 per cent higher than over Easter last year, fuelled by good weather and a 15.3 per cent like-for-like rise within subsidiary chain Chef & Brewer. Greene King reported good drink volume growth across the group, particularly within its local pubs, which recorded like-for-like sales of 4.6 per cent over the year. But these sales eased off to finish 2.4 per cent up on last year’s final 16 weeks.
Elsewhere, Greene King continues to pay off its debenture for the Spirit acquisition, and has so far repaid £393m, or 51 per cent. Analysts at Shore Capital believe this could be fully paid down over the next two years. It is also tapping into its £250m securitisation at 3.6 per cent, creating funding headroom.
Shore Capital upgraded its 2019 full-year pre-tax profit forecast from £243m to £247m. The broker expects profits to rise to £253m in 2020, giving earnings per share of 67p.
