Greene King delivered revenue growth across all four divisions in 2024, increasing group revenue by 3.2% to £2.4bn.
The c.2,600-strong pub operator said the performance was driven by record Christmas bookings and strong demand from events such as the 2024 Men’s Euros.
Adjusted operating profit increased 6.4% to £198m, driven by tight cost control to mitigate industry headwinds. However, the numbers were negatively impacted by the uncertain outlook for the hospitality sector, compounded by the Autumn Budget.
The statutory operating loss was £16.4m, down from a profit of £167.2m in the prior period. The reduction is primarily due to an increase in cost from adjusting items compared to the prior year, largely driven by an impairment charge of £219.9m of some of the group’s assets including goodwill, property plant and equipment and right of use assets. Additionally, there are one-off costs from restructuring the organisation. This led to a a statutory loss before tax of £147.1m versus £45.2m profit in 2023.
The group reiterated it maintains a robust capital structure and strong balance sheet.
Its Greene King pubs divisionm, comprising 878 managed pubs, achieved a 3% increase in revenue, to £966.5m, with a statutory operating profit of £120.2m - down 9.3% on the prior year. However Destination Brands - which includes Hungry Horse, Chef & Brewer, Farmhouse Inns and Flaming Grill - was hit by a £98.6m goodwill impairment in the period, resulting in a statutory loss of £111.5m - down 315% on 2023’s £51.8m profit, despite the division increasing its revenue by 1.5%.
Its Partnerships and Ventures division increase revenue by 6.2% to £447m, and recorded a statutory operating profit of £47.1m, while Brewing & Brands achieved a 4% increase in revenue, to £237.8m, and a statutory operating profit of £18.1m.
‘Fit for the future’
Amid the challenging economic backdrop – and four years after initiating its business and cultural transformation plan – Greene King is now “sharply focused on delivery”. Capex reduced from £194.8m to £172.7m in 2024. This reflects the move to leverage prior years’ investments, but will remain higher in future periods than the historic run rate.
During the year, the group undertook a reorganisation, resulting in a smaller executive board and a restructuring of central support functions, the benefits of which “will be realised across future periods.”
Investing in and evolving assets and brands
The company announced plans for a new £40m custom-built brewery in Bury St Edmunds, expected to be operational in 2027.
The rollout of Hickory’s Smokehouse restaurants continued throughout 2024, while the Pub Partners division performed strongly. Franchised concepts Hive Pubs and Nest Pubs added 14 and 10 sites, respectively.
Greene King has also made multimillion-pound investments into booking systems, customer apps, website development, and the ‘Pub Network of the Future’, which supported record Christmas bookings, the group said.
The company will continue to focus on “what is within its control” to create a sustainable, well-invested, and technology-first business focused on customers, with the ability to mitigate ongoing challenges and drive gain in market share and customer spend.
Nick Mackenzie, Greene King CEO, said: “2024 was a year of transition for Greene King as we shifted our focus from business transformation to delivery and began leveraging our industry-leading investment programme. Pleasingly, we delivered topline revenue growth and have grown ahead of the market. While our tight control of costs meant we also delivered an increase in adjusted operating profit, our statutory results were impacted by the outlook for the industry, which was compounded by decisions made in the government’s Budget which have dramatically increased our costs.
“Whilst we maintain our focus on creating an agile business with a tight grip on what is within our control, the industry continues to face a layering of costs which is changing the fundamental economics of the pub. We would encourage the government to urgently introduce the promised business rates reform, reduce regulation and the cost of doing business to ensure that our critical sector is protected, and pubs remain at the heart of communities UK-wide.
“I want to thank our team members and pub partners who have remained tenacious and dedicated amidst what continues to be a very challenging time for our industry. As we move into a new phase, leveraging the investment of recent years, we will continue to invest with a focus on our people, being customer-first and brand-led and on further enhancing the digital experience. We remain confident in our brands, our people and our ability to deliver for our loyal customers.”
