UK: Greene King has become the UK's largest listed brewer reporting a rise in annual profits despite challenges

Brewer and pub owner Greene King has reported a rise in annual profits despite facing what it said was an "unprecedented set of challenges".

Financial Highlights
�� Revenue £960.5m, +5%
�� Operating profit* £236.2m, +8%; +4.5% excluding acquisitions
�� Operating profit margin* 24.6%, +0.8 percentage points
�� Profit before tax* £142.0m, +2%
�� Adjusted earnings per share* 74.0p, +14%
�� Dividend per share 26.0p, +14%
�� Free cash flow £31.1m after capital expenditure and dividend
�� Successful £350m securitisation tap (post year end); no further refinancing needed until 2012

Business Highlights
�� Retail
Operating profit* +5%
Strong growth in food: now 34% of sales
Loch Fyne successfully integrated and trading well
�� Pub Partners
Operating profit* per pub +8%
Operating profit margin* +3.1 percentage points
�� Belhaven
Operating profit* +18%
Food sales +31%
�� Brewing Company
Own-brewed volume +6%
Market share gains in on- and off-trade

Rooney Anand, Greene King chief executive, comments: “The year saw an unprecedented set of challenges for the industry but I am pleased to report exceptional performance across the business. Our results in Scotland, with operating profit up 18% in the second year of the smoking ban, give me some encouragement for future prospects in England. The economy is not likely to improve in the short term, and we are not immune to the difficulties this presents for our market, but we are better placed than many others, thanks to the resilience and flexibility of our business and our team.”

Green King said it had to withstand the impact of the smoking ban in England, pressure on consumer spending and rising energy and transport costs. It warned that economic conditions would not "improve" in the short term. Greene King shares rose nearly 3% in early trading after the results were published.

Following the sale of Scottish & Newcastle earlier this year, Greene King has become the UK's largest listed brewer. It runs about 800 managed pubs and restaurants as well as 1,440 tenanted and leased outlets.

www.greeneking.co.uk

04 July, 2008