Pub food helps Greene King profit beat forecasts

By Matthew Scuffham

LONDON (Reuters) - Pubs group Greene King (GNK.L) beat full-year profits expectations on Thursday to send its shares higher as rising food sales offset the impact of a smoking ban.

Greene King, which has around 2,500 pubs in England and Scotland, said pretax profit before exceptional items for the 53 weeks to May 4 rose to 142 million pounds from 139.8 million the year before.

That beat all estimates in a Reuters Estimates poll of 15 analysts which ranged from 129 million to 141 million pounds. Revenue increased by 5 percent to 960.5 million.

Food sales were up 31 percent during the year and now account for over a third of total sales. Chief Executive Rooney Anand said he doesn't think the increasing contribution from food is under threat from the worsening economic environment.

"Pubs offer an affordable indulgence.....Pub food still offers great value when you compare it to restaurants. I'm not complacent about the challenges that the economy poses for pub businesses but I think that the downturn and the impact on pubs has been overblown," he said.

Greene King also said it is confident of meeting its expectations for the current year. The consensus for pretax profit stands at 139 million pounds.

Shares in Greene King, which have underperformed the FTSE All Share Travel & Leisure Index .FTASX5750 by 30 percent since the start of the year, were up 7.1 percent at 428-3/4 pence at 10:35 a.m.

Anand described the performance as exceptional in light of "an unprecedented set of challenges for the industry".