With bookings up 17 per cent at the same stage last year and with the Christmas and New Year holidays falling in mid-week, we expect the festive period to be a good one for the sector. Greene King’s shares have risen modestly in recent trading. We do not see any reason for full year 2014 consensus to change. Greene King remains one of our two favoured pub stocks. Buy.
The group plans to open 90 new managed pubs over the next 18 months. Like-for-like sales slowed to 0.2 per cent in the six weeks to 13 October but this has recovered to 3.5 per cent in the last six weeks and Christmas bookings are up 13 per cent. Although first half results were marginally lower than we expected… we expect no change to full year 2014 consensus expectations.
We are holding our 2014 forecast, although we believe forecast risk is on the upside. We forecast interest costs rising £7.3m in 2014; consensus’s £3.5m increase is too small, in our view. However, managed trading is ahead and weather comparisons are easy, especially in the fourth quarter due to around three weeks of snow in that period last year.