Greene King to focus on improvements to recent acquisitions

Pub company and brewer Greene King will concentrate over the next year on improving and investing in the pubs it has recently bought, chief executive Tim Bridge said last week as the company reported another year of increased turnover and profits.

Finance director Michael Shallow said that the group, which has a net debt of £387.9m, could borrow a further £100m to fund expansion but would probably wait a year. He suggested that to sustain double-digit turnover growth the group needed to buy an average of 100 pubs a year. Last year Greene King bought more than 250 pubs.

The group invested £5.7m in renovating Old English Inns and will spend another £12m over the next two years. The pub hotels, which Greene King bought in September 2001, contributed a trading profit of £1.7m on a turnover of £36.3m in their eight months in the group.

Of the Morrells business, which Greene King bought for £67m last month, 77 pubs will be run under tenancies or leases, 15 will be managed, and 15 sold. Bridge said the pubs, mostly within 30 miles of Oxford, will become Greene King pubs and sell its range of ales. The Oxford brewery closed three years ago and Morrells ales are now brewed under contract by Thomas Hardy.

Bridge said there was "certainly a lot of integration to finish off" within the Old English Inns and Morrells estates as well as the nine Dalgety Taverns that Greene King bought for £12.1m earlier this year. They are being converted to the Hungry Horse chain, where food is a key feature.

Greene King reported pre-tax profit up by 10% to £69.2m on turnover up by 15% to £494.5m for the year to 4 May. The company expects to sell 60 pubs for £25m this year.

by Ben Walker