United Kingdom: British regional brewer and pubs company Greene King Plc, which brews Greene King IPA, Old Speckled Hen and Abbot Ale beers and runs over 2,100 pubs largely in southern England, announced on December 9 a 15 % rise in first-half underlying profits to £44.4 million, topping market expectations. The brewery said that buying 432 pubs from Laurel earlier this year helped surged first-half (24 weeks to October 17) sales 22% to £314.4m from £258m the year before.

Chief executive Tim Bridge said: "These are a strong set of figures for the 24 weeks, with underlying trading profit growth of eight per cent and the first contribution from the Laurel Neighbourhood acquisition. We have a thriving brewing business and a well-invested high quality pub estate and we feel well placed to continue trading successfully."

Greene King said pre-tax profits rose to £42.7m from £35.6m. The Laurel acquisition was paid for through existing debt facilities, leaving Greene King with debt of £628m at the half year and gearing of 158pc. Overall beer volumes were flat in the half year though sales of Greene King IPA rose 3pc.

The 205-year-old Suffolk brewer divides its business into brewing, managed pubs and leased pubs. It said today all three operations were "trading strongly", with total like-for-like sales at its Pub Company business up 2.1 per cent in the period - a slight slowdown from the 2.6 per cent rise in the May-July first-quarter. Mr Bridge said the firm’s brewing operation at Bury St Edmunds had performed well "despite poor summer weather".

Volume sales of Greene King IPA rose three per cent, while Abbot Ale and Old Speckled Hen sales were two per cent higher. The group said its brewery was running at up to about 95 per cent of its capacity on a two-shift system without the need to resort to lower margin contract brewing. "We can add extra capacity through a third shift and extra fermenting space, when we need to do so, at little expense," Mr Bridge said.

During the period under review, turnover at the Brewing Company business rose three per cent to £50.9m and trading profit by eight per cent to £8.4m. In July, Greene King announced the £654m acquisition of the Laurel Neighbourhood pub estate consisting of 432 managed houses, the majority of which had previously belonged to leisure giant Whitbread.

More than half of the pubs are spread across southern England, with the remainder split between the Midlands, the north-west and the north-east of England. Greene King chairman David McCall said the group was "on course to deliver annual synergies of £6m in the first full year of ownership". The Laurel deal took Greene King’s pub estate through the 2000 mark.

Meanwhile, shareholders are set to be rewarded with a ten per cent rise in half-year dividends to 10.45 pence a share. Greene King shares have outperformed the FTSE 100 index by around 40 per cent this year and close rival Wolverhampton & Dudley Breweries by ten per cent, according to Business Scotsman.

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