Sales at British pub operator Greene King grew over the 40 weeks to 5 February due to a strong Christmas period, but it was hit by a "dramatic" slowdown of sales in the quieter months.
In a trading statement today, Greene King said like-for-like sales grew 1.1 per cent over the period.
For the three Christmas weeks from 19 December to 8 January, like-for-like sales grew 4.5 per cent, helped by strong growth in London. The pub operator said it made record-breaking sales of £7.4m on Christmas Day, up six per cent on the previous year.
Volume for the company's own-brewed brands, including Greene King IPA, Old Speckled Hen and Abbot Ale, fell 4.2 per cent over the period.
Shares were down 2.57 per cent at 683p in afternoon trading.
So far, the company has hit its target of 11 new pub acquisitions while selling 59 pubs for a total of £35m. It said it plans to dispose of a further 50 to 60 this year, raising £30m to £40m.
Why it's interesting
Greene King has continually warned about headwinds facing the industry, including fallout from the Brexit vote: in November, chief executive Rooney Anand said the consumer environment will become more challenging as consumer uncertainty increases, cost pressures mount and the dynamics of eating out change.
Although the operator of around 3,029 pubs, restaurants and hotels across the UK said it had strong trading over Christmas, sales were hit by a slowdown in the quieter November and January months.
It has had a boost from its acquisition of Spirit Pubs, though. The company said over 1,000 pubs have now been converted while ongoing synergy savings have been realised.
What Greene King said
"Looking ahead, despite continued economic uncertainty and significant cost pressures, we will remain focused on building our retail pub brands, delivering great experiences to our guests and completing the Spirit integration," Greene King said.
"We are confident that the combined strength of our brands, pubs, people and cash generation leaves us well placed to deliver another year of progress, value creation and returns for our shareholders."
What analysts said
"Greene King’s strong Christmas performance suggests that the slowdown in November and January has been dramatic," said Nicholas Hyett, equity analyst at Hargreaves Lansdown.
He said the group, which acts as a consumer bellwether, is likely to be hit by economic uncertainty going forward.
"However, the group is in a stronger position than many in the squeezed casual dining sector. Its balance sheet is packed with pub freeholds, cash flow is good and synergies are still to be realised from the Spirit acquisition. 2017 is set to be a tough year, but Greene King looks sober enough to weather it."
There are still tough months ahead for Greene King that won't be pretty, but the pub operator is in a better position that others.