Pubs group Greene King (LON:GNK) had a good Christmas, with like-for-like year-on-years sales growth accelerating in its core retail estate.
Greene King Retail's like-for-like (LFL) sales in the 40 weeks to 7 February were up 2.2% compared to the same period, an improvement on the 2% growth rate in the 24 weeks to 18 October.
The recently acquired Spirit division, however, saw LFL sales growth ease to 1.1% in the managed estate, from 1.2% at the 18-week stage.
Greene King's Pub Partners division LFL net income was up 2.5% year-on-year.
In the two weeks covering Christmas and the New Year, LFL sales were up 5.0% year-on-year at Greene King and up 5.2% at Chef & Brewer operator Spirit.
The company said integration of Spirit was progressing well with encouraging results from four rebranded trial sites.
“This was another strong performance, with all divisions trading well during the important festive period, and record trading on Christmas Day. The latest Greene King Leisure Spend Tracker shows that, despite varying their choices when eating out, pubs were a major destination for customers,” said Rooney Anand, chief executive officer of Greene King.
On the brewing side, Greene King's own-brewed volume was up 3.9% from a year earlier, driven by sales of the flagship IPA and Old Speckled Hen brands.
Greene King IPA has been helped by its popularity surge in China, following a well-publicised pub visit by Chinese president Xi Jinping on his visit to Britain in November, and the distribution from within the Spirit managed estate.
The group said its outlook for the current year remains unchanged.
“This looks like a positive start for the enlarged group, with both the Greene King and Spirit estates enjoying a strong Christmas,” said Steve Clayton, head of Equity Research at broker Hargreaves Lansdown.
“The acquisition of Spirit has given the group a step-change in scale and increased the exposure to managed houses and the South of the country, including the fabulous Taylor Walker estate in London. Managed pub numbers have increased from 1,064 to 1,548 as a result of the deal. The group is thus ever more exposed to casual dining, which is a market with a strong growth record as Britons eat fewer meals in the home,” Clayton noted.
“The brand portfolio of the enlarged group is being rationalised, with the group taking a 'best of both' approach to combining the two businesses. The integration benefits are coming in stronger than first planned, though to be fair, the expected level of incremental capital investment also looks to be a little higher too, at £40-50mln per annum over the next three years or so,” Clayton concluded.
Shares in Greene King were outperforming a rising market in early deals, rising 2.2% to 852.5p.