Greene King & Crawshaw Profit Warnings

In Weatherspoon’s full year results announcement, their CEO Tim Martin took the opportunity to criticise Greene King for blaming poor results on Brexit. He said “The only thing worse than complaining about the weather is complaining about Brexit”, implying that they were poor excuses.

Yesterday (13/9/2016) butcher Crawshaw Group went further. In a profit warning “trading update” they blamed suppressed footfall patterns on “international football, adverse weather and Brexit”. In addition they said customers were now even more price focussed and they were suffering from supermarkets launching aggressive promotions.

The share price fell 44% on the day putting a damper on this previously high flying micro-cap. Perhaps investors were not impressed by these excuses.

Comment: I’m with Tim Martin on this in that I take a jaundiced view of complaints about the weather, even from retailers and Brexit seems to be bogeyman used by lots of companies to scare their investors. I learned to be sceptical about weather excuses after holding some shares in Hozelock in the past. When the weather was dry they claimed hosepipe bans had suppressed demand. When the weather was wet, they claimed nobody was buying watering equipment. To blame the Brexit decision for reduced beer consumption seems odd indeed. Some might be drinking more to drown their sorrows about the decision, while others might be drinking more to celebrate. There appears to be little evidence that retail sales have been reduced since the Brexit decision so Crawshaw’s analysis of their problems is hardly credible.

Roger Lawson

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