Pub operator Greene King's comparable sales growth loses shine

(Reuters) - Pub operator Greene King Plc (GNK.L) posted a 1.1 percent rise in comparable sales for the 40 weeks to Feb. 5 on strong trading during Christmas, but said growth was muted in November and January.

Like-for-like sales for the three Christmas weeks of Dec.19 to Jan.8 grew 4.5 percent, aided by strong growth in London, Greene King said.

The company, which brews ales such as Greene King IPA, Old Speckled Hen and Abbot Ale, said own-brewed volume for the 40-week period fell 4.2 percent.

The brewer reiterated its warning about continued economic uncertainty and significant cost pressures ahead.

In November, it had warned that expected government initiatives like the national living wage, minimum wage, apprenticeship levy and proposed increases in business rates would increase cost pressure in the hospitality industry.

The company had then reported a 1.3 percent growth in like-for-like sales for the 24 weeks to Oct. 16.

The Suffolk-based brewer, which operates around 3,029 pubs, restaurants and hotels across England, Wales and Scotland, said it planned to dispose 50-60 pubs this year, raising proceeds of about 30-40 million pounds.

Greene King said it has made further progress in integrating the Spirit Pub business, which it bought in 2014 for 774 million pound ($968.3 million). http://reut.rs/2gwfqt9

Third quarter trading is satisfactory, but has slowed slightly since second quarter and has not firmed as expected, analysts at Panmure Gordon & Co wrote in a client note.

The brokerage slashed its target price on the stock to 850 pence from 1050 pence.

Shares in the company were down 1.5 percent to 690.5 pence by 0945 GMT, reversing some of its earlier losses. The stock had fallen as much as 3.4 percent in the session.

(Reporting by Rahul B in Bengaluru; Editing by Gopakumar Warrier and Amrutha Gayathri)