Bad weather is bad news, but the dividend is attractive and Greene King typically excels in winter.
On balance, Greene King (LSE:GNK) full-year numbers edge into the "glass half-full" category, as the pub owner and brewer continues to extract value from its brand and estate.
Apart from a healthy return on capital of 8.5%, Greene King is also looking to stay trim by way of its estate optimisation programme, while also keeping a lid on costs. Net debt was reduced by over 4% during the period, group revenue edged higher, while like-for-like sales were reportedly ahead of the competition.
Strong operating cash flow has also enabled the company to manage the balance sheet while also keeping its financial commitments. One such commitment is the dividend, where the current punchy yield of 5.7% is both well-covered and attractive for income seekers, as well as being something of a guarantee from the company over the years.
In the meantime, the decline of licensed premises in the UK plays into the company's hands and even changing consumer behaviour towards higher-end products provides opportunities.
Source: TradingView Past performance is not a guide to future performance
At the same time, the pressure within the industry, not least to strike the right balance between food and drinks-led venues, is a difficult balancing act and, where competition remains, it is fierce.
The company is also, to an extent, a hostage to the fortune of the weather, and indeed the outlook for the group has already been impacted in the first couple of months by poor temperatures as well as strong comparatives.
The Spirit acquisition still casts something of a shadow in terms of a high net debt figure of £1.9 billion, although this is under control. From a wider perspective, it remains to be seen whether consumer confidence and therefore spending will be impacted by any further delays, or less than desirable outcomes, to the Brexit discussions.
Greene King is clearly being well-managed, with an aspirational strategy to be Britain's best beer and pub company underpinned by careful financial management. The 14% hike in the share price over the last six months is a sign of progress, although over the last year the shares have given up 12%, as compared to a drop of 8% for the wider FTSE250 index.
Even so, the aims of the company are clear, and the market is prepared to go along with the strategy, such that the general view of the shares at present comes in as a 'buy'.
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