The ‘Beast from the East’ took its toll on Greene King PLC (LON:GNK), with the pub operator reporting a fall in sales in the final quarter of its financial year.
The FTSE 250 group said the harsh weather in February and March impacted trading, particularly at its ‘destination’ food-led pubs.
Sales down across all three business
With a couple of weeks left in its financial year, like-for-like sales in Greene King’s Pub Company division – which accounts for more than 80% of group revenues – are 1.8% down year-on-year.
Even excluding the impact of the snowy weather, like-for-like sales are 1.2% lower compared to the same period last year.
The main issue seems to be food sales, with drink and accommodation like-for-likes both ahead of the prior year.
Greene King isn’t the only company struggling on this front: Franco Manco owner Fulham Shore PLC (LON:FUL) and Frankie & Benny’s parent Restaurant Group PLC (LON:RTN) have both bemoaned weakening market conditions, while burger chain Byron and Jamie’s Italian have been forced to close loss-making restaurants.
Sale of three pubs to prop up full-year profits
Easter was a more enjoyable time for the business though, with several big football matches and the Anthony Joshua boxing match helping to boost like-for-like sales by 2.8% versus last year’s Easter weekend.
Like Pub Company, Greene King’s other two divisions have also struggled so far in the year-to-date.
After 48 weeks, like-for-like net profits in its Pub Partners pub leasing business were down 0.3% year-on-year, while volumes in its brewery arm – Brewing & Brands – are off 0.3%, although that’s considerably better than the rest of the UK ale market (-3.1%).
Despite a difficult final quarter, Greene King expects to post a full-year pre-tax profit of £240-245mln thanks to the sale of three “high-value” leasehold pubs.
Given that guidance remains unchanged, City analysts expect the dividend to be secure. That soothed investors, with shares frothing 5.4% higher at the opening bell to 490.2p.