The pub chain is one of the UK’s largest and is also a major brewer, producing Greene King IPA, Old Speckled Hen and Belhaven beers

Greene King’s chief executive has attributed the firm’s decision to place 150 pubs up for sale to the “unprecedented” costs currently battering the hospitality industry.

The pub giant, one of Britain’s largest chains, unveiled plans to put up to 150 pubs on the chopping block in March, with chief executive Nick Mackenzie telling City AM the move was driven by escalating costs and “changing consumer behaviour”.

The company, which also brews Greene King IPA, Old Speckled Hen and Belhaven beers, intends to move 300 pubs into a separate unit, with half set to become leased or tenanted venues and the remaining half earmarked for sale.

Presenting the Chinese-owned pub firm’s annual results, Mackenzie said: “Long-term permanent reform from government is essential to ensure that unprecedented costs do not hold back the enormous potential of the sector.”

He told City AM the disposal of pubs formed part of a routine review of the Greene King estate, but that the chain chose to act ahead of the curve in response to a shifting economic climate, as reported by City AM.

He pointed the finger at “the cost environment that our industry has faced for the last five years, which is increased employment costs, increased cost of goods through events like the Ukraine war and now obviously what’s happening in Iran and the general economy”.

Mackenzie also turned his fire on business rates, after changes to the tax at last year’s Budget sent bills rocketing for thousands of pubs and left Chancellor Rachel Reeves forced into a £300m concession.

Labour committed to business rates reform in its manifesto but has yet to deliver wholesale change to the tax.

The pub boss said: “Business rates are unbalanced for our sector so we want the reform that was promised, and the fundamental reform is to rebalance the level of business rates taxation that our sector pays.”

Mackenzie, who sits on the government’s hospitality advisory board, said he is urging Labour to cut taxes on beer and reconsider its rollout of guaranteed hours rules for workers on zero-hour contracts.

Last month, several prominent trade bodies cautioned the government that its current proposals to clamp down on zero-hour contracts would cause youth unemployment to spike.

As consumer confidence slides to its lowest point in more than two years, Mackenzie said he is “worried” Brits may rein in non-essential spending such as trips to the pub.

Yet Mackenzie is hopeful the World Cup this summer will give Greene King’s revenues a lift, as the government commits to allowing pubs to stay open later. Greene King reported a 3.6 per cent rise in revenue to £2.5bn last year, posting an operating profit of £94m, a significant turnaround from a £16m loss the previous year.

The pub giant is currently constructing a new £40m brewery in Bury St Edmunds, which is due to open next year. The firm channelled £10m into its London estate this year, with notable sites including the Blue Posts in Soho and The Railway Tavern on Liverpool Street among those to benefit.

Greene King runs approximately 2,600 pubs across Britain, of which 840 are directly managed, with the remainder operating under franchise or tenancy arrangements.

Established by Benjamin Greene in Bury St Edmunds in 1799, Greene King was once listed on the London Stock Exchange before being taken private by Hong Kong billionaire Li Ka-Shing’s CK Asset Holdings in a £2.7bn deal in 2019.

Markets may be swinging between optimism and caution, but beneath the volatility lies a framework that seasoned investors are using to stay grounded. According to Shibani Sircar Kurian of Kotak AMC while uncertainty remains elevated due to global developments, valuations and historical trends provide a degree of comfort.

“So, yes, of course, we are navigating volatility at this point in time, and we do not know how long this volatility lasts… markets typically bottom out before the actual end of the war scenario.”

She pointed out that recoveries after crises are usually driven first by valuation re-rating before earnings catch up.

“When the markets start to recover, the initial leg… is led by multiples rerating, and then earnings have to flow through.”

On valuations, she noted that current levels are reasonable but not deeply attractive.

“Today… the Nifty is trading at about 19 times on a one-year forward, which is slightly below its long-term averages… valuations are reasonable… but not in deep value territory.”
Given this backdrop, the strategy remains cautious but opportunistic.“We will use market corrections to add to equities, but near-term volatility is something that we will have to navigate.”

Banking Sector Stands Out
Among sectors, banking has emerged as a clear outperformer this earnings season, with strong balance sheet growth and stable asset quality.

“The banking sector has seen fairly good numbers… both across balance sheet as well as earnings.”

Credit growth has picked up across segments, supporting expansion. “Credit growth has started to pick up… across industry as well as retail credit.”

Importantly, concerns around bad loans have not materialised.

“The fear of asset quality deterioration clearly has not played out… credit costs are well under control.” With interest rates stabilising, margins could also improve going ahead.

“We do expect… net interest margins also stabilise… and therefore there would likely be a pickup in earnings for FY27.” She added that valuations in the sector remain favourable. “Valuations are clearly on your side… banks, both private and PSU… we are positive on.”

Telecom: Improving Fundamentals
The telecom sector, after years of disruption, is seeing a more stable phase driven by consolidation and gradual tariff hikes.

“This has been a sector where consolidation has played out…” Profitability is improving as users shift to higher-paying plans.

“ARPU expansion has taken place at a gradual pace, and that is aiding profitability.” The outlook remains constructive for leading players.

“Some of the top players are fairly well placed… improvement in profitability is continuing.”

Private Banks Preferred
While both PSU and private banks look attractive, Kurian indicated a slight preference for private sector lenders. “We are overall positive on the banking sector; however… a slight preference for the private sector banks…”

The reason lies in valuation comfort relative to historical averages.

“The multiples are significantly below their long-term averages… the slight preference… is because of the valuation differential.”

Outlook: Stay Selective, Use Volatility
The broader message is clear—markets may remain volatile, but not directionless. With earnings expectations largely intact and valuations reasonable, corrections could offer opportunities for disciplined investors.

For now, the approach remains simple: stay selective, watch global cues closely, and use dips to gradually build exposure.

This article was written by

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