Greene King Half Year Report

[idpickering]

Continued LFL sales momentum in Pub Company

· Pub Company like-for-like (LFL) sales up 2.7%, ahead of the market4 up 1.1%

· Driven by the ongoing benefits from our investment in value, service and quality (VSQ), our strategic focus on four core brands, and boosted by good weather and the World Cup

· Pub Partners LFL net income up; Brewing & Brands revenue up 7.5%

Consistent cash generation, disciplined capital allocation & attractive property valuation

· Operating cash generated5 covers scheduled debt repayment, core capex and dividends

· Further steps taken to refinance Spirit debenture, reducing cost and increasing flexibility of our debt; to date annualised cash interest saving c.£13m and net present value benefit c.£45m

· Interim dividend maintained at 8.8p per share; dividend cover5 of 1.9x

· Estate optimisation; tail disposal proceeds fund new builds, helping to grow average weekly take in Pub Company by 7.9% over the last three years

· Pub estate valuation supports maintained leverage; market value of £4.5bn

Current trading and outlook

· LFL sales in Pub Company were up 2.9% at week 30; Pub Partners and Brewing & Brands performing in line with expectations

· Christmas bookings well ahead of last year

· Remain on track to limit full year net cost inflation to £10-20m

And later;

DIVIDEND

The board has declared an interim dividend of 8.8 pence per share, which is in line with last year. This will be paid on 18 January 2019 to shareholders on the register at the close of business on 7 December 2018.

https://www.investegate.co.uk/greene-ki ... 00108386I/

[Wizard]

Looks OK. Greene King's dividend looks a lot more mainstream these days so no surprise.

Terry.

[scrumpyjack]

Quite encouraging. Particularly the result of the appraisal of the market value of their estate which shows a £900 m surplus over book value.

That underpins the balance sheet and improves their bargaining position vs lenders.

One extraordinarily sloppy thing I noticed. In note 6 they got the Sept 2017 final dividend wrong in the comparatives! (They say 24.60 when it was 24.40). I spotted that in a 2 minute glance at the results

[maximan]

Thanks Ian
Not bad at all. Although the dividend is flat at 8.8p it is covered 1.9x.
I also like that operating cash generated covers scheduled debt repayment,core capex and dividend.

[idpickering]

Thanks Ian
Not bad at all. Although the dividend is flat at 8.8p it is covered 1.9x.
I also like that operating cash generated covers scheduled debt repayment,core capex and dividend.

You're welcome. I agree re the dividend. The results have gone down well with the sp up over 4%.

Ian.

[Arborbridge]

Steady as she goes - hopefully the "Brexit" worries about the effect on consumer spending and costs was overdone.

There's still the new CEO appointment hanging around, though. These results will probably encourage me to top up in my WyfHYP this month before Dec 7th.

Arb.

[pyad]

...One extraordinarily sloppy thing I noticed. In note 6 they got the Sept 2017 final dividend wrong in the comparatives! (They say 24.60 when it was 24.40). I spotted that in a 2 minute glance at the results

Blimey, you must have led a sheltered life if you consider that tiny, unimportant error to be "extraordinarily sloppy". Perhaps a bit too much of the scrumpy, Jack.

I continue to rate GNK an HYP Buy after giving these accounts a scroot, despite the held interim payout. Assuming the full year div is also held at 33.2p, the forward yield is 6.2% at 535p.

[andyalan10]

Blimey, you must have led a sheltered life if you consider that tiny, unimportant error to be "extraordinarily sloppy". Perhaps a bit too much of the scrumpy, Jack.

Hmm, it was someone who worked with accounts who told me "There's no such thing as a small error in accounting, it's either right or it's wrong". Of course the accounting profession has moved on a long way since then. I'm with scrumpy, if a number of people can't get things right in an official announcement then that is sloppy. Granted in today's world, perhaps it is not extraordinarily sloppy, but still.

[Arborbridge]

Blimey, you must have led a sheltered life if you consider that tiny, unimportant error to be "extraordinarily sloppy". Perhaps a bit too much of the scrumpy, Jack.

Hmm, it was someone who worked with accounts who told me "There's no such thing as a small error in accounting, it's either right or it's wrong". Of course the accounting profession has moved on a long way since then. I'm with scrumpy, if a number of people can't get things right in an official announcement then that is sloppy. Granted in today's world, perhaps it is not extraordinarily sloppy, but still.

So we can get accounts which are absolutely right until the are absolutely wrong - by about £40m!

I'd not be bothered by what might be a proof reading error or a typo not spotted by someone. Have you never read something three times only to find an error when it's seen in print?
I'm more worried about the poor accounting which leads to the aforementioned massive errors by highly paid accountants rather than sloppiness by lower end staff which this probably is.

The lack of human understanding in these comments is what I find extraordinary and it makes no difference to us whatsoever. Are we really thereby to conclude that GNK is an unreliable badly run company? It's all piffle.

Arb.

[scrumpyjack]

Yes I was a chartered accountant, and auditor, many decades ago and it would be very very very rare for such an error to have occurred then. Trivial in itself but slapdash for professionals to miss it.

More interesting

https://uk.webfg.com/news/broker-recomm ... 20267.html

Whilst I normally am very sceptical of brokers views, in this case I have to agree with them that the shares are materially undervalued at the current price.

[Arborbridge]

For those interested in topping up on the HSDL regular investment day, I believe this coincides with the XD for GNK - which as far as I can determine is 6th Dec.

If you want to get in cum-dividend, you should buy on the cheap dealing day (Wednesday 5th) though the dealing charges are slightly higher than on a regular investment day.

Please DYOR - I don't guarantee I've got this correct so it's more of a warning to investigate!

Alternatively, the cheaper day (6th) would be a good day to test the theory that it's better to wait until xd day before buying to lock in more shares at a lower price.

Arb.

[Wizard]

For those interested in topping up on the HSDL regular investment day, I believe this coincides with the XD for GNK - which as far as I can determine is 6th Dec.

If you want to get in cum-dividend, you should buy on the cheap dealing day (Wednesday 5th) though the dealing charges are slightly higher than on a regular investment day.

Please DYOR - I don't guarantee I've got this correct so it's more of a warning to investigate!

Alternatively, the cheaper day (6th) would be a good day to test the theory that it's better to wait until xd day before buying to lock in more shares at a lower price.

Arb.

Guessing HSDL is a broker, Halifax maybe. Is that right?

Terry.

[Arborbridge]

Guessing HSDL is a broker, Halifax maybe. Is that right?

Terry.

Sorry, yes that's correct. I guess those who have accounts would know; others wouldn't benefit; but I should have mentioned it anyway.

Halifax as mentioned here:

viewtopic.php?f=15&t=14993

[Arborbridge]

Topped up GNK first thing today. Price dropped buy 10p on the close but XD for the 8.8p was yesterday.

Unusually for me, I deliberately timed it not to buy the dividend.

BTW, this particular broker does not have a cheap dealing day, so buying cum-div would not have saved dealing fees.

Arb.

[maximan]

Hi Arb
XD is showing in my records as today.
I have noticed that the shorts showing on Castellain Capital are down to 2.85%. I know they only show shorts above 0.5% and there could be a few just below this figure but definitely on a downward trend.
Good luck with the purchase.

[Gengulphus]

Topped up GNK first thing today. Price dropped buy 10p on the close but XD for the 8.8p was yesterday.

No, the 8.8p went XD today. Greene King don't appear to be helpful about telling shareholders what it is, but the quote in the OP indicates that the record date is December 7th, i.e. tomorrow, and since the shift to a T+2 default settlement period a few years back, the ex-dividend date has generally been one trading day earlier than the record date. It's also usually the case that the record date is a Friday and the ex-dividend date a Thursday, with the main exceptions being when bank holidays force a change (which generally only ever happens around Christmas, the New Year and Easter, the other bank holidays being on Mondays) and a very occasional case when a company wants to do something different badly enough to ask the LSE for special treatment. (It's presumably only very occasional because a few days' difference in the timetable almost always makes only a negligible difference.)

If you look at the December ex-dividend list in Itsallaguess's post, you'll see just how widespread adherence to that is: every ex-dividend date (including Greene King's) is one of the 6th, the 13th, the 20th and the 27th, which are the four Thursdays in the month (Christmas and the New Year 'miss' all the relevant dates this year).

Gengulphus

[Arborbridge]

Topped up GNK first thing today. Price dropped buy 10p on the close but XD for the 8.8p was yesterday.

No, the 8.8p went XD today. Greene King don't appear to be helpful about telling shareholders what it is, but the quote in the OP indicates that the record date is December 7th, i.e. tomorrow, and since the shift to a T+2 default settlement period a few years back, the ex-dividend date has generally been one trading day earlier than the record date. It's also usually the case that the record date is a Friday and the ex-dividend date a Thursday, with the main exceptions being when bank holidays force a change (which generally only ever happens around Christmas, the New Year and Easter, the other bank holidays being on Mondays) and a very occasional case when a company wants to do something different badly enough to ask the LSE for special treatment. (It's presumably only very occasional because a few days' difference in the timetable almost always makes only a negligible difference.)

If you look at the December ex-dividend list in Itsallaguess's post, you'll see just how widespread adherence to that is: every ex-dividend date (including Greene King's) is one of the 6th, the 13th, the 20th and the 27th, which are the four Thursdays in the month (Christmas and the New Year 'miss' all the relevant dates this year).

Gengulphus

Sorry, I realised it was today - my double think, and that is how I knew the price would most likely drop. Yesterday was "last day of cum-d" rather than "XD" day.