A brief update from Greene King (GNK) the brewer, pub and restaurant operator in which they reported a very modest 0.4% rise in their retail like for likes in the first 18 weeks of their current financial year. They blamed this on tough comparatives form an excellent summer last year ( I thought this years was better weather wise) and a poor performance by England in the World Cup plus on going consumer caution.
However their other businesses traded well: Pub Partners total LFL net income was up 3.7% after 16 weeks, while in Brewing & Brands, own-brewed volume was up 6.2% after 18 weeks, driven by strong growth from Old Speckled Hen, the UK's no.1 premium ale brand. They say they expect the momentum in these business to be maintained and for retail to see a stronger second half helped further by some new openings which are more weighted towards the second half this year.
So overall a steady as she goes type of statement with not too much to get worked up about either way, although the retail side seems a bit flat so far this year. After recent upgrades the shares stand on around 13x and a 3.6% yield which seems fair enough.
Meanwhile Kingfisher (KGF) the UK & European DIY and building materials retailer has reported Interims which also saw fairly lack lustre like for like sales growth of 1.8% or 0.9% in total. On the back of this their profits and earnings were unchanged while they edged up the dividend by 1%. They did however flag a £12m profit hit from currencies and without this profits would have been up by 3.3%. They also incurred development costs of £11m in new markets for them in Portugal, Germany & Romania. France was pretty flat as the French economy continues to struggle while the UK was the star with LFL's up 4.4% and profits up by 17.7% benefiting from initiatives to re-energise B&Q and better demand for trade products as housing construction and activity improved.
Overall a reasonable outcome after the disappointing Q2 update they put out earlier in the year as their French operations stabilized somewhat towards the end of the period. This continues to offset the recovery in the UK as does their investment in new markets. This leaves a fairly flat outlook for the year but with their return of capital programme / share buy backs likely to support the shares, the recent fall in the share price leaves them looking reasonable value on around 13x with a 3.7% yield backed up by a solid balance sheet so a strong hold I would suggest.