Pub operator Greene King performed in line with expectations in the year to the end of April, but it warned the UK's difficult trading environment will worsen over the next few years.
In preliminary results for the year, the pub giant said adjusted profit before tax increased 6.6 per cent to £273.5m. Meanwhile, revenue increased 6.9 per cent to a record £2.22bn.
The group increased its dividend 3.6 per cent to 33.2p per share.
Shares in the company were broadly flat in late morning trading.
Why it's interesting
Greene King, which has continually warned about headwinds facing the industry, including fallout from the Brexit vote, today said its solid performance was achieved against a demanding backdrop of increased costs, weaker consumer confidence and increasing competition.
"While I expect these challenges to intensify over the next few years, Greene King has a very strong track record of delivery in tough market conditions," said chief executive Rooney Anand.
Operating 2,924 pubs, restaurants and hotels across the UK, Greene King has felt a benefit from its acquisition of Spirit Pubs. However, Nicholas Hyett, equity analyst at Hargreaves Lansdown, warned that this also increased the group’s exposure to the casual dining market, an industry under pressure.
Hyett added that Greene King has a few things on its side: "The balance sheet is packed with freehold pubs, supporting cash generation, while the ongoing project to switch weaker Spirit branded pubs into the better performing Greene King formats is generating some very impressive results. Together, these should help the group weather any storms that are brewing."
What Greene King said
"Greene King has delivered another set of record results."
Using the scale that the Spirit acquisition has brought, we will continue towards our aim of being the best pub company in Britain. We will achieve this goal by ensuring we have the best brands, the best invested estate and the best people in the industry. We will target further market outperformance, in a growing market, supported by additional cost efficiencies, a robust balance sheet and strong cash generation to deliver long-term growth and attractive returns for our shareholders.