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Greene King serves up higher profits

Belhaven and Loch Fyne owner Greene King toasted higher profits today as it pulled in recession-hit customers with a broad range of promotions.

The Bury St Edmunds-based group, which operates more than 2,298 pubs, restaurants and hotels, reported a 4.3% rise in like-for-like sales in the 24 weeks to October 14.

The firm, which also runs Old English Inns and employs 22,000 people, said it was helped by a "flight to value" among consumers amid the tough economic climate.

Announcing a 7% rise in pre-tax profits to £82.7 million, Greene King said it boosted its share of the £41 billion "informal dining market" by broadening its food offers to drive growth.

Against a market that is growing value at around 3%, food sales in Greene King's retail division were up 12% in the period.

Shares in the group were 1% higher after the results were published.

Douglas Jack, analyst at brokers Numis Securities, said it was "a good performance given that it occurred during a record wet summer".

At Hungry Horse, its weekly offers are now 27% of all food sold and its loyalty programme, being trialled in 40 sites, now has over 22,000 members.

At Eating Inn, it reduced average selling prices by 5%, while in Loch Fyne it increased the average portion size of its "fish your way" dish.

And at its Belhaven pubs, it introduced Carling as a value lager.

The group said wine and coffee were also important for growth and it saw a 22% rise in wine sales as it grew its offer, while hot beverage sales, of which coffee is 75%, were up 8.3% in the period.

The group's brewing and brands division saw its core own-brewed volumes fall 0.9%, although this outperformed the UK ale market which was down 3%.

Premium ale brand Old Speckled Hen saw volume growth of 5.9% against a premium ale market up 1.8% and Greene King IPA, the cask ale brand, achieved volume growth of 2.2%, in a standard ale market down 5%.

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