Profits fizz at takeover target Spirit despite tough summer
A strong performance by its managed pubs arm frothed up annual profits at takeover target Spirit Pub Company despite mixed summer weather and higher costs.
Greene King
849.20p
17:15 30/10/19
Spirit Pub Company
119.40p
15:29 23/06/15
Spirit, which said on Monday it would be willing to recommend a revised £723m takeover bid from rival Greene King subject to terms, said pre-tax profits in the 53 weeks to 23 August rose 11% to £60m, while underlying pre-tax earnings lifted 7% to £159m.
The group, which owns the Chef & Brewer, Fayre & Square, Flaming Grill, Taylor Walker and John Barras chains, said its managed pub division boosted like-for-like sales by 4.4.% on a 52-week basis.
"While we benefited from better weather in the first half of the year, we faced tougher weather comparatives over the summer months," the group said.
It also said some efficiency gains had been partially offset by higher carbon reduction taxes and the cost of introducing new TV sport channels from BT Sport into the estate. The strong performance also resulted in higher bonus costs than in the prior year, with most of the bonuses going to pub staff.
The group said its leased estate was firmly in growth, with like-for-like sales rising 2.8% and like-for-like net income lifting 4.2%.
It recommended a final dividend of 1.5p per share, which, subject to approval by shareholders and the status of the possible offer for Spirit by Greene King, will be payable on 10 February 2015, increasing the total dividend for the year by 8% to 2.22p per share against last year.
In the six weeks to 4 October 2014, managed pub like-for-like sales rose 2.6% and leased like-for-like net income was up at 4.6% with the cold and wet August bank holiday weekend being offset by more favourable weather in September.
Chief executive Mike Tye said: "Although there are some encouraging lead indicators regarding the consumer environment, we expect it to remain challenging.
"However, we believe the continued execution of our strategy to deliver hospitality excellence and the opportunity to expand our estate through further acquisitions will allow us to make further progress in the year ahead."
Shares rose 0.25p or 0.25% to 101.25p at 09:20 in London.