Greene King, the UK pub owner and brewer, recently released a trading statement for the 36 weeks up to 6 January 2019. The Pub Company division reported like-for-like sales up 3.2% with record Christmas day sales of £7.7m. They also announced progress on their debt refinancing programme, repurchasing £62m worth of their bonds.
Greene King completed the acquisition of the Spirit Pub Company in June 2015; this left the combined entity with 3,100 pubs across the UK. The aim of this takeover was to drive sales and cut costs through head office synergies; however the high price paid and a back-drop of declining pub customers has proved a difficult environment to quickly generate such benefits.
In November 2018 the incumbent CEO Rooney Anand announced he will be stepping down after approximately 14 years at the helm. Rooney has guided the company through both the Global Financial Crisis and take-over of Spirit with a steady hand and he undoubtedly leaves the business in a better state than when he arrived. The company announced Nick Mackenzie will take over in May 2019. Nick currently heads up the property and development arm of Merlin Entertainments, the brand known for running Legoland and Alton Towers. Given Greene Kings large estate of pubs he has been viewed as a suitable candidate.
Both weather and sporting events can affect beverage sales significantly. The beginning of 2018 started negatively with ‘The Beast from the East’, although the summer following proved very beneficial for sales, courtesy of very good weather and England’s achievements through the Football World Cup. Weather remains unpredictable but the Rugby World Cup in Japan starts this September. However these factors are not the only keys to success. The company has continued progress in delivering their strategy, and shoring up the balance sheet. Investors will want to see the impact of the incoming CEO and what experience he can bring.