Greene King calls for 'urgent' action as cost rises hit profits

Greene King has reported a loss before tax of more than £140m after its performance was impacted by a “dramatic increase” in costs.

Chief executive Nick Mackenzie said cost rises implemented in the Autumn Budget, including an increase to employer National Insurance Contributions (NICs), had changed "the fundamental economics of the pub".

He called on the government to "urgently" take action and deliver on business rate reform. 

Profits at the pub giant, which operates over 2,000 locations, were hit despite revenues increasing by 3.2% during 2024 to £2.45b, driven by record Christmas bookings and strong demand during the 2024 Euros.

The sales growth resulted in a 6.4% increase in adjusted operating profit, which reached £198m.

However economic and political conditions as well as non-cash goodwill and property accounting impairments resulted in the business recording a statutory operating loss of £16.4m and a statutory loss before tax of £147.1m.

This compared to a £45.2m profit the previous year.

Mackenzie said: “Pleasingly, we delivered top line revenue growth and have grown ahead of the market. While our tight control of costs meant we also delivered an increase in adjusted operating profit, our statutory results were impacted by the outlook for the industry, which was compounded by decisions made in the government’s budget which have dramatically increased our costs.

“Whilst we maintain our focus on creating an agile business with a tight grip on what is within our control, the industry continues to face a layering of costs which is changing the fundamental economics of the pub. We would encourage the government to urgently introduce the promised business rates reform, reduce regulation and the cost of doing business to ensure that our critical sector is protected, and pubs remain at the heart of communities UK-wide.”

Within its financial results Greene King said it had reduced capital expenditure in the year by more than £20m.

The business has also reduced the size of its executive board and restructured central support functions.

The number of Greene King pubs fell from 898 to 878 during the year. Its branded division, which includes Hungry Horse and Chef & Brewer, fell from 600 to 580 sites and the number of sites under leased, tenanted and franchise agreements fell from 1,125 to 1,114.

Greene King has also announced plans for a new £40m custom-built brewery in Bury St Edmunds, Suffolk, which is expected to be operational in 2027.