Greene King has stressed it retains a “flexible approach to expansion” and has a c£110m war chest for acquisitions in 2015 with a strong pipeline and targets unaffected by the Spirit transaction.
On the back of yesterday’s H115 results, the company set out its five-year plan, which would see brands and formats rationalised and further reduction in the company’s tenanted and leased estate.
Outlining its vision to “build the best UK pub and beer business” the company said it planned to emerge with a “smaller, better” tenanted estate with innovation in agreements and a retail estate expanded to 1,100 sites with “increased exposure to eating-out.
Other elements of its ‘Project 2020’ plan include “exploring day part diversification” (the company revealed that breakfast sales at Hungry Horse outlets are up 23%) and raising the hospitality bar through its ‘Value, Service and Quality’ agreements.
It has capital expenditure of of c£85m for FY15 and up to c£110m acquisition capital.
The company’s outlook for 2015 predicts continued ‘subdued spending’ from customers but with forecasted earnings growth and grocery and fuel deflation, but warned that consumers were becoming more savvy and that the industry needed to be mindful of meal option proliferation. Greene King said it had recognised the rise in inter-generational experiences and responded by pushing its ‘golden years’ offers as well as its overall children’s offer and experience.
As of 19 October Greene King’s estate stood at 1,898, down from 2.181, as of 5 June. It is made up of 520 Destination Pubs, 520 Local Pubs and 858 Pub Partners – of which 195 are leased, 608 tenanted and 55 franchised.
Its brand portfolio stood at 231 Hungry Horse outlets (up from 226 at the end of FY2014); 114 Old English Inns (FY14: 116); 41 Loch Fyne Seafood and Grill (no change); 29 Eating Inn (no change); 30 Realpubs (FY14: 27) and 26 Farmhouse Inns (FY14: 21).
