Greene King shares fall despite sales growth during bumper Easter
Pub chain Greene King is set to post moderate sales growth for the full year after its strong Christmas trading carried over into the Easter period.
The pub operator and brewer said it expects like-for-like sales growth of 2.9 per cent in the 52 weeks to 28 April, ahead of market expectations.
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Despite this, shares in the company fell more than six per cent following the trading update.
Greene King has been hit by ballooning costs due to food price inflation, rising rates and wage increases. But the firm posted record sales of £7.7m on Christmas Day, and said its like-for-like sales over the Easter weekend were up 4.6 per cent, boosted by good weather.
Greene King, which brews ales such as Old Speckled Hen and Abbot Ale, forecast full-year profit before tax of between £244m and £247m.
But Mark Brumby, analyst at Langton Capital, said the figures may have been boosted by profit-taking after a strong period of trading in recent months.
“Greene King has pointed to a slight slowing over the last 16 weeks of its financial year which, given that the Beast from the East has fallen out of numbers and a very warm Easter has been included in, may be just a tad disappointing,” he added.
The pre-close trading statement is the last for outgoing chief executive Rooney Anand, who will step down on 1 May after 14 years at the helm.
“We have traded strongly this year and have returned to market outperformance,” said Anand.
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“As I hand over to my successor Nick Mackenzie, I believe that, with our strong pub and beer brands, talented and dedicated team and high-quality estate, Greene King is well positioned to make further progress and continue outperforming the market.”
The firm, which operates almost 3,000 pubs, restaurants and hotels across the UK, said it expects to limit net cost inflation to between £10m and £20m over the year.