Overall ranking: 5 (14 in 2012)
Pub and bar operator: 2 (2 in 2012)
Greene King has been an institution in Bury St Edmunds since 1799, and long-serving chief executive Rooney Anand is demonstrating similar staying power, having joined the brewer and pub operator in 2001 as managing director of its brewing division. He took up his current role in 2005. For the year to 30 April 2017, the group reported revenue up 6.9% year-on-year to £2.2b, and operating profits up 4.9% to £411.5m. Greene King operates almost 3,000 outlets, with a retail arm of pubs, restaurants and hotels, and a tenanted, leased and franchised pub division. Its retail brands include Loch Fyne, Hungry Horse, Flaming Grill, and Chef & Brewer. Its beers include Greene King IPA, Old Speckled Hen, Abbot Ale and Belhaven Best.
What we think
Anand’s background as a consumer goods specialist may have raised a few eyebrows in the City and among “the beerage”, as the traditional family brewers are sometimes called, when he took up the top job at Greene King, but he has long since demonstrated the wisdom of the appointment. It was his experience in senior marketing roles with brand owners such as Sara Lee and United Biscuits that persuaded Greene King to put him in charge of its brewing arm, and in recognition that the beers needed to be treated less like commodities and more like brands.
Within four years, Anand was chief executive and, in the 12 years since, he has proved as adept at the retail side of the business as the beer brands. The acquisition of the Loch Fyne seafood restaurant business in 2007 put Greene King ahead of the curve in spotting the increasing affinity between pubs, where food became more important in the sales mix, and the burgeoning casual-dining market.
Other significant acquisitions have included pub restaurant group Cloverleaf in the north of England, and Realpubs and the Capital Pub Company in London, but it is the £774m deal to buy the Spirit Pub Company in 2014 that is Anand’s greatest achievement at Greene King to date. Along with almost 800 pubs, the deal gave Greene King the Flaming Grill pub brand, which has proved complementary to its existing Hungry Horse format, as well as the premium Chef & Brewer brand.
The integration of the Spirit pubs operation completed a year ahead of schedule delivered cost savings of £30m and has given the business increased flexibility. During its last financial year, the business spent £30.2m on brand conversions at 63 pubs.
A trading update earlier this month for the first 49 weeks of the current financial year to 8 April 2018 reported that profit before tax for the year to the end of April is estimated to be in line with market estimations of £240m-£245m. However, managed sales were down by 1.8%, indicating that a more challenging time may lie ahead for the pub giant.
Anand was named Leader of the Year at the 2016 Lloyds Bank National Business Awards. Accepting the award, he said of Greene King: “The most exciting thing is there is still a lot of opportunity for the company to grow in the future.”
Greene King’s managed pubs endure challenging first half >>