JP Morgan applauds Greene King for 'undoubtedly' good start to the year

Analysts at JP Morgan said that nature had given Greene King a somewhat unexpected boost throughout the first 18 weeks of its fiscal year 2019 as the UK's long, hot summer drove the pubco's like-for-like sales ahead 2.8% year-on-year.

JP Morgan said England's successful World Cup bid had also boosted sales, with Greene King, which sold 3.7m pints of beer during the seven World Cup matches, benefitting more than others due to its higher proportion of wet-led local pubs and extensive outdoor space.

With like-for-like sales up 61% on the date of the semi-final, the broker praised the landlord's "undoubtedly" good start to the year, but noted that against a weak comparator of 1.2% over the same period last year, and the factors contributing to the strong performance, it could not be extrapolated to the balance of the year.

JP Morgan kept its full-year adjusted pre-tax profit estimate unchanged at £244.0m, in line with the company-compiled consensus of £242.0m, adding that it could see "no let-up in cost inflation" and plenty of reason to remain wary of consumer demand as the UK approaches the deadline for its exit from the EU.

The broker reiterated its 'underweight' rating and 475p target price on Greene King.