Warm weather boosts Greene King as growth accelerates in Q1

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LONDON (ShareCast) - Pub group Greene King (LSE: GNK.L - news) said that decent weather this summer and growing consumer confidence helped drive sales in its first quarter, with like-for-like (LFL) growth accelerating strongly.

LFL sales in its largest business, Retail, were up 4.6% during the 18 weeks to September 1st, as the difficult comparatives of the Queen's Jubilee and the European football in 2012 were outweighed by the good weather. This was a pick-up from the meagre 0.6% LFL growth registered in Retail in the second half of the previous financial year.

The company operates a total 2,300 pubs, restaurants and hotels across the UK, of which 1,000 are part of its Retail division. The firm opened its 1,000th Retail site during the period in North Tyneside.

Greene King said there are "cautious signs of optimism" about the UK economy and it is seeing indications of growing consumer confidence. "This performance has been helped by some one-off factors including the feel-good factor from continued British sporting success and the arrival of the Royal Baby, combined with much improved weather over the summer months," it said.

The company said that more customers were taking up holidays in the UK, which helped boost LFL accommodation sales growth to 6.0%. Food meanwhile continues to improves it share of the business with LFL sales growing 5.7%. LFL drink sales were up 3.7%.

"While the pace of the recovery remains uncertain, we believe that our strategy, tailored for the prevailing conditions, will continue to deliver improving returns, sustained earnings growth and attractive dividends for our shareholders. We look forward to another successful year."

Brands run under the Retail unit include Hungry Horse, Old English Inns and Loch Fyne.

BC

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