Laurel buy boosts results at Greene King

Pub operator and brewer Greene King today reported record annual results which represented its 30th year of uninterrupted profit growth.

At the same time, the Office of Fair Trading announced that it is considering whether to refer Greene King's acquisition of TD Ridley & Sons two days ago to the Competition Commission.

In the year to 1 May group turnover soared by 33% to £732.6m, up from £552.7m in 2004.

This included £177.9m from acquisitions, chiefly the £654m purchase of 432 Laurel neighbourhood pubs in August last year. They were integrated into the estate by February and contributed 39 weeks of trading profits to the group figures.

The group also offloaded 51 outlets during the past financial year.

Total pre-tax profits dropped slightly to £72.8m from £73.7m, but rose by 14% to £94m before goodwill and exceptional items were deducted.

Greene King's managed pub division, Pub Company, was the main beneficiary of the Laurel buy, which helped boost the number of pubs from 551 to 801.

The division boosted trading profit by 65% from £56.9m to £93.8m. Turnover increased from £331.6m in 2004 to £495.9m.

Pub Partners, the group's leased and tenanted division, grew from 1,153 pubs to 1,244. Trading profit grew by 13% from £47.8m to £54m while turnover increased from £115m to £125.1m.

The group's brewing division also performed well and its Greene King IPA became the UK's top cask beer brand. Trading profit increased by 11% to £17.8m and turnover grew from £106.1m to £111.6m.

Chief executive Rooney Anand said trading in the current financial year had begun well for all three divisions.

Although the company will submit its new licence applications by the end of July, in advance of the August deadline, it does not expect trading hours to change substantially in the majority of its pubs.

Its managed pubs will ban smoking at the bar and back of house by the end of the year and increase the overall non-smoking areas inside. However, Greene King believes 83% of its managed pubs have outside spaces that can be converted to cater for smokers.

The group's £45.6m acquisition of TD Ridley & Sons two days ago netted 71 freehold tenanted pubs, two leasehold tenanted pubs and a brewery in Chelmsford, which will close.

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