At its AGM today, Greene King will make the following trading statement for the 18 weeks to 03 September 2017.
In the first 18 weeks of the year, Pub Company like-for-like (LFL) sales were -1.2%, against a market which declined -0.7%*. Excluding Fayre & Square, which is being rebranded during this financial year, LFL sales were -0.9%. In the first ten weeks, LFL sales were in line with our expectations and broadly in line with last year, despite the tough comparisons from Euro 2016. However, since the second half of July, when the weather worsened, trading weakened.
Over the course of the year so far, most of the LFL sales decline can be attributed to value food, although more recently we saw some softening across other segments. We are continuing to address the challenges of the value food sector through measured capital investment to upgrade and reposition pubs and through selective disposals.
We are strengthening our customer offer with both our net promoter scores and our food quality scores across Pub Company continuing to improve this year, while our brand conversion programme is delivering returns in excess of 20%.
In terms of costs, our programme to deliver £45m of cost savings this year, including further cost synergies from the Spirit acquisition, is on track. The scale of our cost saving programme helps to reduce the impact of weaker than anticipated sales through limiting margin declines from unprecedented industry cost pressures.
Our other two businesses, Pub Partners and Brewing & Brands, continue to deliver strong returns and cash for the company. LFL net profit in Pub Partners was up 1.4% after 16 weeks, with the impact of MRO in line with our expectations. In Brewing & Brands, own-brewed volume was down -0.5% against a UK ale market down -2.9%** and a cask ale market down- 7.0%**.
We remain cautious about the trading environment and expect the challenges of weaker consumer confidence, increased costs and increasing competition to persist over the near term. In the longer term, utilising the benefits of the Spirit acquisition, our brand conversion and cost saving programmes, our robust balance sheet and our strong cash generation will be important levers to help deliver competitive advantage, growth and attractive and sustainable dividends for our shareholders.