Family friendly direction helps Belhaven Brewery to "oustanding" performance

Jul 3 2008

Operating profit at pub and brewing group up 18 per cent

Operating profits at Belhaven Brewery have soared by 18 per cent to £27.5m despite the smoking ban, parent group Greene King has revealed.

Greene King chief executive Rooney Anand said all its divisions had performed well in difficult circumstances but he was particularly encouraged by Belhaven’s results which had been “outstanding.”

“Scotland’s smoke ban came over a year before England’s,” he said.

“In the second year of the ban the Belhaven team have developed the business significantly towards food and families.”

Belhaven’s food revenue has increased by more than 50 per cent during the last two years.

"Our results in Scotland give me some encouragement for future prospects in England," he said.

“We are not immune to the difficulties in the market but we believe we are better placed than others.”

The number of Belhaven branded pubs trading grew from 299 to 321 including seven transferred from Greene King’s English Retail business.

Some 95 of the 321 pubs are managed and the balance tenanted or leased.

Its drinks business grew with Belhaven Best volume up by 4.6 per cent.

Anand piled praise on Belhaven managing director Stuart Ross who is due to retire this autumn.

“Since he joined the Green King top team at the time of the acquisition the whole business has benefited extensively from his experience and exceptional talent. The results in Scotland make a fitting valediction.”

Anand said the process to find a replacement for Ross was well underway.

Overall sales at  Greene King fell nearly three per cent in May and June.

The Suffolk-based group, which also owns the Loch Fyne restaurant group, warned pub beer sales had come under "considerable" pressure thanks to plunging consumer confidence, the English smoking ban and raw material cost increases.
Its retail arm, which comprises 753 managed pubs and 39 restaurants, said like-for-like sales dropped 2.8 per cent.

The group also operates another 1,800 mainly leased premises.

Greene King posted pre-tax profits of £142 million for the 53 weeks ended May 3, up two per cent from the year before, and broadly in line with market expectations.

Keith Bowman, equity analyst at Hargreaves Lansdown, said Greene King's results may add "a glimmer of cheer" to the downbeat pub and leisure sector.

He cited Belhaven's performance in Scotland as evidence that the initial gloom from the restrictions was beginning to lift.
 
"Overall, like just about every consumer facing business, management at Greene King remain cautious regarding the near term future," Mr Bowman said.

"However, Greene King is a far more diverse business - both via product and location - than that which traded just ten years ago and management remain confident that the group will continue to out-perform rivals."