United Kingdom, London: Greene King Plc, which operates over 2,000 U.K. pubs and brews Old Speckled Hen ale, announced on January 31 its beer sales increased by 2.2% in the first nine months of the year and Christmas trading had gone well. “Like-for-like sales at Greene King's managed pubs were up 2.2% over the 36 weeks to January 9, while sales at its tenanted pubs rose 1.2%,” the company said. Its strong, fruity Old Speckled Hen increased sales by 6 %, while its flagship Abbot Ale was up 5 %. But its pub landlords saw a smaller 2 % increase in the volume of beer flowing through their pumps, reflecting lower growth of non-Greene King beers.

Trading for the 36 weeks was in line with expectations, it added. Numis Securities called the statement "solid" and upgraded its recommendation on the stock to "Add" from "Hold". The 205-year-old Suffolk, eastern England brewer, which bought 432 Laurel pubs last August, said the new business was integrating smoothly and the process was currently four weeks ahead of schedule. The transfer of 103 of its managed pubs and 57 of its new Laurel pubs into the hands of tenants was going to plan, it added.

Shares of Greene King dropped 33 pence, or 2.6 percent, to 1,252 pence in London on Friday, January 28, valuing the company at 902.7 million pounds ($1.7 billion.) The stock has risen 43 percent in the past 12 months, the third-biggest gain in the 18-member FTSE 350 Leisure & Hotels Index, which has added 25 percent.

Rivals Mitchells & Butlers, Punch Taverns Enterprise Inns and Wolverhampton & Dudley have already reported good Christmas and New Year trading.

Analysts forecast underlying pretax profit of between 93 and 94.7 million pounds for the year to May 2, 2005, against 82.6 million the previous year. Its shares were flat at 1,252 pence in morning trade (Jan. 31), valuing the group at around 900 million pounds.

Greene King, which owns and runs the Hungry Horse and Old English Inns chains, wants to increase the percentage of revenue it gets from selling food in its outlets to as much as 35 percent from 33 percent, Mark Angela, the managing director of Greene King's managed pub division, said in an interview last week. The company also wants to focus on increasing total sales at existing outlets and at pubs it bought from Laurel Pub Co. last year for 654 million pounds, instead of pursuing more acquisitions, Angela said.

Greene King is divided into a brewing company, a unit called Pub Co. that manages about 780 pubs, and a business called Pub Partners, which rents out about 1,300 outlets. The operating profit margin, or income as a percentage of sales, at Pub Co. outlets was 18.3 percent in the 36-week period. The margin at its brewing business was 16.5 percent.

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