However, despite the above, Greene King which I wrote up earlier in this year, announced a pre close trading update today in which they saw continued strong trading momentum. So it seems things may have improved a little in 2013 and into this year. In the statement the CEO also mentions their Leisure Tracker Report which you can *download it from here if you are interested in seeing how you compare. For example the average household in the UK spent nearly £75 ($126 / €92) on eating out and £40 ($67 / €49 ) on drinking out in March 2014. This also highlights some other interesting trends in how consumers are choosing to spend their money.
Otherwise the business highlights from the statement were:
· Retail like-for-like (LFL) sales up 4.1% and up 4.8% in the last 16 weeks
· 22nd consecutive quarter of LFL sales growth
· Food LFL sales up 5.0% and room LFL sales up 6.8%
· Average EBITDA per pub in Pub Partners up 5.0%
· Core brand own-brewed volumes (OBV) up 4.6%
· Expect to meet market expectations for the full year
They said they expect to meet the market's full year expectations for profit, cash flow and the balance sheet, with further improvement in ROCE and a further reduction in leverage. Meanwhile the chief executive, Rooney Anand, on the outlook said:
"Looking ahead, we see the UK's economic outlook improving. Throughout the downturn wage growth lagged inflation but this quarter has seen that change for the first time since the recession began, which bodes well for the future. Customers, though, are still spending carefully, as highlighted by our most recent Leisure Spend Tracker report*. Hence we remain cautiously optimistic for the forthcoming financial year."
So he seems encouraged by the recent signs of improvement in the economy and I guess they could be a beneficiary from the World Cup and extended opening times on England's match days that has been allowed, but I'm not expecting us to be in it for very long! Greene King (GNK) seems a like a solid hold as part of a diversified income portfolio on around 13 to 14x P/E with a yield in excess of 3% and trend growth of around 7% expected.