April 12, 2018 / 6:35 AM / 2 years ago

Greene King sees profit in line on property disposals

(Reuters) - Pub operator Greene King Plc GNK.L reported a 1.8 percent drop in like-for-like sales for 49 weeks to early April on Thursday, hurt by the cold wave during February-March, but projected annual pretax profit largely in line with market estimates.

FILE PHOTO: A Greene King beer pump and pint of beer are seen in a pub in central London July 2, 2008. REUTERS/Luke MacGregor

Shares of the company surged as much as 9.1 percent to 507.2 pence in early trading.

The owner of ale brands such as Greene King IPA, Old Speckled Hen and Abbot Ale said weather over the last 12 weeks hurt its trading, joining a string of British businesses that took a hit from the cold wave in the UK during February-March.

However, on an underlying basis, excluding the impact of snow, comparable sales in the period to April 8 were down 1.2 percent, Greene King said.

Greene King now expects full-year profit before tax to be in the range of 240-245 million pounds on a windfall from estate disposal.

Disposal proceeds for the full year are likely to be ahead of expectations at 120 million pounds, the company said.

The company said it remained on track to deliver targeted cost savings of 40-45 million pounds in its current year.

The weather system dubbed “the Beast from the East” brought rare snow and sub-zero temperatures to much of Britain in late February and early March bringing normal life to a standstill.

A survey last week showed the heavy snow and weak consumer demand weighed on British services businesses, which grew at the slowest rate since just after Britain voted to leave the European Union in June 2016.

Own-brewed volumes in brewing and brands were 0.7 percent lower but ahead of the UK ale market which was down just over 3 percent, Greene King said.

Greene King is also battling rising costs due to the government’s National Living Wage initiative, higher property prices and unfavourable currency exchange rate.

Reporting by Rahul B in Bengaluru; Editing by Amrutha Gayathri and Gopakumar Warrier

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