Greene King to close brewery in pounds 14m revamp
The package of changes, which also includes three distribution depot closures, accompanied half-year results which showed a 38 per cent rise in pre-exceptional profits for the 24 weeks to October. It is part of a focus on Greene King's core ales, which now also include Wexford Irish Cream Ale, and its fast-growing retail estate, where new concepts such as Ale Cafe and Hungry Horse are being rolled out.
The closure of Biggleswade means that brewery's distribution site will also close, along with others at Norwich and Furneux Pelham. Tim Bridge, chief executive, said the job losses would be more than offset by the creation of 300 new jobs in its retail arm this year, followed by a similar number next year.
Greene King's profits were boosted by a first time contribution from the Magic Pub company, which was included for 15 weeks in the first-half result. The acquisition of Magic, for pounds 200m in July, took Greene King's pub estate to more than 1,100 and means the company now makes more than half its profits from retailing.
Mr Bridge said he was pleased with the acquisition, which made a pounds 70m fortune for founder Michael Cannon, but represented only pounds 700,000 a pub, low by the standards of recent pub chain deals.
Including the Magic contribution, sales jumped 41 per cent in the period from pounds 76.1m to pounds 107.6m. Trading profit was more than 50 per cent better at pounds 20.4m, while profit before tax grew 21 per cent to pounds 13.4m (pounds 11.1m). After a 5 per cent increase in earnings per share to 18.8p, an interim dividend of 4.75p was recommended, a 12 per cent increase.
Mr Bridge said Greene King was on track to deliver synergy benefits of pounds 3m from the acquisition of Magic Pub, thanks to greater purchasing power, the sale of Greene King ales through the enlarged chain and reductions in overheads.
Magic Pub contributed pounds 6m of trading profit in the period, slightly less than the pounds 7.2m generated in the full six-month period by the existing retail estate, a 12 per cent rise. Tenanted pubs increased by 4 per cent to pounds 8m, while higher marketing costs reduced the brewing contribution to pounds 3m (pounds 3.2m).
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