Greene King swings to loss in full-year results

Greene King has swung to a pre-tax loss of £273m in the full-year ended 26 April, down from a profit of £172.8m reported in 2019. 

It comes after exceptional and non-underlying costs hit £380.6m in the period, up from £74.1m the year before. 

In the same period, revenue fell by 12.4% to £1.9bn. Revenues were down across the entire business, with losses seen in Pub Company, Pub Partners and Brewing and Brands. 

Pub Company was “most impacted” by the pandemic, with revenue down by 13.5% to £1.6bn, and no trading revenue generated after week 47. 

Operating profit was down 31.7% to £186.4m and the operating margin was 12%, a decline of 3.2 percentage points. Meanwhile, like-for-like sales in the division fell by 13%. 

In addition, Pub Partners revenue was down 16.9% to £157.9m, with revenue from deliveries last being generated in week 47. Like-for-like net income in the division was also down by 12.7%. 

Brewing and Brands was the only division to continue trading throughout the period, despite only trading to off-trade outlets for the final five weeks of the year. 

Its revenue was down 10% to £204.8m, with total beer volume down 13.6%. Operating profit plummeted 71.9% to £7.7m, driven by the fall in volumes across the year, but largely accelerated by the effects of Covid-19. 

The disposal of 66 non-core pubs generated net proceeds of £35.1m in the period, however, while £2.9m was spent on three new builds. A further £2.4m was spent completing the refurbishment of three other sites, while £14.8m was spent purchasing the freeholds on five sites.

In its full-year update, the group said the impact of the Covid-19 has had an “unprecedented and critical impact” on both the hospitality sector and the group. 

It comes as the group recognised a charge of £45m in exceptional items in relation to the pandemic. This includes stock write-offs, incremental bad debt provisions on both free trade loans as well as trade debt and direct one-off costs in relation to the pandemic.

It added there is “yet no certainty” as to how the business can recover following lockdown.