Greene King sees profits spike thanks to Spirit acquisition

02 December 2015 by
Greene King sees profits spike thanks to Spirit acquisition

Greene King has reported a 49.5% rise in pre tax profits for the first half of its financial year to £121.3m following the acquisition of Spirit.

Total revenue for the six months to 18 October 2016 was up 49.2% at £917.7m thanks to the addition of 416 Spirit pubs, taking Greene King's total estate to 3,069 pubs.

Chief executive Rooney Anand said the Spirit integration was progressing ahead of plan.

"In addition, we now expect to exceed our initial guidance on cost synergies and have raised the synergy target to £35m," he added. "We also see the potential for additional revenue benefits through optimising the combined brand portfolio and gaining further distribution for our ale brands."

Anand said that the introduction of the National Living Wage would add £2m to the wage bill in 2016/6, but that the business was able to mitigate the cost through changes to shift patterns.

Like-for-like at Spirit managed sites were up 1.2% in the period, while Pub Partners net income was up 2.4% & Brewing and Brands own-brewed volume was up +3.6%.

Looking ahead, Anand said the group would look to halve its number of brands to a core 10. He said that currently the growth brands were Hungry Horse, Flaming Grill, Farmhouse Inns, Chef & Brewer and Metropolitan, its premium London estate.

Anand said: "It has been a strong first half, with the Greene King business strengthening and significant progress made in the Spirit integration.
Like-for-like sales growth in Greene King Retail improved during the half and both Pub Partners and Brewing & Brands delivered profit growth and margin expansion.

"We completed the acquisition of Spirit Pub Company and, by combining the best of both companies, made good progress in capturing value from the acquisition and creating the UK's leading pub hospitality company.

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