Greene King, owners of Scottish brewers Belhaven, has reported record sales but warned that people are still cautious about spending on drinking and eating out.
The Suffolk-based company reported that profit before tax and exceptional items was down 3.5% at £82.6 million in the first half of the year due to the sale of 275 pubs to Hawthorn Leisure.
The retained business grew profits by 3% and enjoyed record sales and revenues of £614.9m for the 24 weeks to October 19.
The brewer of Belhaven, Abbot Ale, Old Speckled Hen and Greene King IPA, which operates 1,904 pubs across England, Scotland and Wales, said its own spending tracker showed that people are spending less on eating and drinking this Christmas.
The southern estate of the business had outperformed the northern estate despite the company’s own bookings for the festive period being 7.2% higher year-on-year.
Greene King chief executive Rooney Anand said: “With real incomes struggling to grow, customers remain cautious about spending on eating and drinking out.
“As a result, we will continue to tailor our customer-focused strategy to ensure we deliver another year of progress, long-term growth and strong returns to our shareholders.”
Reviewing performance over the half year, he continued: “Retail, our largest business, delivered profit growth while we maintained momentum in pub partners and brewing brands.
“As a result we improved our return on capital employed, lowered our leverage and increased the dividend.”
Greene King also made further significant strategic progress by increasing its real estate and disposing of non-core tenanted pubs to enhance the quality of its estate and making a recommended offer for the Spirit Pub Company.
The £773.6m recommended takeover of Spirit is the near-term priority. The deal, which still needs to be voted on by shareholders, will grow the combined company to 3,100 pubs, 1,800 of which are managed.
Spirit’s brands include Chef & Brewer, represented in Tayside by the Bell Tree at Panmurefield in Dundee, and Taylor Walker, which has a presence in Fife with the Central Bar in St Andrews.
Greene King said that it is still interested in pursuing Spirit because of the Chef & Brewer and Taylor Walker pub owner’s managed estate.
Shares in Greene King closed down 1p at 759.50.