Greene King sales given cold weather jolt

Like-for-like sales across its managed pubs - which include Old English Inns and the Hungry Horse chain - were up 5% in the 35 weeks to January 3, but this slowed to 4.3% three weeks later thanks to the poor weather.

Greene King saw buoyant trading over the two-week period, helping the group produce "profitable growth despite the challenging conditions".

But the Suffolk-based firm warned that sales growth would ease as the year progressed due to tough trading comparisons and the return of VAT to 17.5% this month.

"Whilst the UK consumer outlook is still uncertain, we are confident that we will meet the board's expectations for this financial year," the company said.

The group noted improving trends in its tenanted pubs, helped by easier comparisons and stronger beer sales due to price support for licensees.

Average earnings per pub have been just 0.8% lower since October 18, although they are 4.9% down for the first 36 weeks of the financial year.

Greene King said the division was helped by the offloading of its weaker pubs and the improving "health" of licensees. Applications to run pubs were 20% higher than a year earlier in December, the company said.

The firm meanwhile hailed another good showing from its Old Speckled Hen and Abbot Ale brewing business, which weathered the snow to post a 7.2% rise in volumes after 38 weeks.

Greene King has spent 15.9 million on a further eight pubs from rival Punch Taverns, funded from the proceeds of a 207 million cash call on shareholders last year.

The group believes it has got a good deal, adding that the quality, location and historic return of the pubs "would support a value in excess of 16 million".

The company has now spent 79 million of the funds raised on 26 managed pubs as well as repurchasing debt.