Greene King Plc (GNK.L) on Thursday announced its preliminary fiscal 2012 results, reporting a higher profit benefited by a growth in retail and food sales. The pub retailer and brewer also lifted its dividend, but said its outlook for the rest of the year remains uncertain citing customers' cautious spending.
Chief Executive Officer Rooney Anand said, "We are in the middle of an exciting summer for Britain, despite the unpredictable weather, with the Diamond Jubilee, Euro 2012 and with the Olympics still to come. However, looking further ahead, our customers' spending will continue to be squeezed and concerns remain about job security."
For the 52 weeks to April 29, pre-tax profit grew 7 percent to 125.1 million pounds. Pre-tax profit before exceptional items totaled 152.0 million pounds, up 8.6 percent from a year ago. Adjusted earnings per share rose to 52.9 pence from 48.1 pence in the prior year.
The company, which operates 2,334 pubs, restaurants and hotels, reported that revenues increased 9.4 percent to 1.14 billion pounds. The biggest driver of this growth came from the Retail estate where revenue grew by 13.1 percent with average revenue per pub rising by 7.6 percent. Retail like-for-like sales growth was 4 percent, and food sales climbed 17 percent.
Meanwhile, operating margin declined 60 basis points to 20.7 percent hurt by the negative impact of cost inflation.
Further, the board recommended a final dividend of 18.1 pence per share, up 7.7 percent on last year, leading to a total dividend of 24.8 pence per share, up 7.4 percent on last year.
Regarding the current trading, the company noted that LFL sales in Greene King Retail in the first eight weeks of the new financial year grew 7.1 percent, and Brewing & Brands core brand volume growth is 2.7 percent. The company said strong momentum in underlying trading performance has continued into the new financial year, augmented by the Diamond Jubilee and Euro 2012.
"The outlook for the rest of the year remains uncertain as our customers continue to be challenged by pressure on their disposable income and uncertainty around their job security. However, our strategy is tailored for the prevailing conditions.... We are confident we can continue to make strong progress, not only for this year, but also for the long-term," the company said in its statement.
In London, Greene King shares are currently trading at 531 pence, down 0.50 pence or 0.09 percent.
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