Greene warns of 'fragile' year ahead

The firm's managed pubs – including the Hungry Horse and Old English Inn chains – grew like-for-like sales 3.6 per cent in the 49 weeks to April 11, down from 4.3 per cent after 38 weeks of the year.

The Old Speckled Hen and IPA brewer also said beer volumes were up 3.9 per cent in a beer market showing 6 per cent declines – also below the 7.2 per cent growth seen in January.

The Suffolk-based firm warned: "We are still cautious for the remainder of 2010 as election uncertainty, rising taxes, public sector cutbacks and fragile consumer confidence may continue to limit consumer spending."

The company is confident of meeting profit targets for the year after a "strong" performance.

The group also reported stronger than expected sales from recent acquisitions after spending 86m – almost half of last year's rights issue proceeds – on bolstering its estate and buying back debt cheaply.

Greene King said it was confident of driving further growth through acquisitions this year while maintaining financial discipline.

There were also signs of stabilisation at Greene King's tenanted pub business, with average earnings per pub 3.4 per cent down after 48 weeks but broadly stable compared with last year.