Pub chain Greene King (LSE:GNK) has warned that a “tough environment” still awaits despite reporting a strong year of growth in its full-year results.
Investors, analysts, and punters have all been patiently waiting for the sector to begin outperforming pre-pandemic levels, but with a cost-of-living crisis, industry woes have persisted.
Therefore, it makes it even more concerning that Greene King (LSE:GNK), which reported sales had jumped by 60% to £2.2bln in 2022, remains “mindful of the significant cost pressures impacting both consumers and our business”.
The group pointed to poor consumer confidence, inflationary pressures, and supply chain issues as potential catalysts for the weakening market.
The company, which is owned by Hong Kong-based firm CK Asset Holdings, revealed that in 2022 it was forced to increase prices at its venues to lessen the impact of high input costs.
Operating profits at the pub operator jumped to £192mln last year, having previously been at £18.6mln in 2021.
Yet, this figure is close to a quarter less than the £253mln in profit reported back in 2020 and close to half that of the £368mln in underlying earnings from 2019.
Despite this, the industry – in particular the beverage market – has shown indications of recovery.
Between the 16 and 22 April, wine sales grew by 3% year-on-year while beer remained flat as total drinks managed to lift 6% annually between the 19 and 21 April.
Of note, here though is that this uneventful week in April was compared to the Easter weekend in 2022.