There were a couple of strategic reasons behind the acquisition of the Spirit Pub Company, Davis reveals.
“Firstly, Greene King was very well represented in London and the south-east, East Anglia, and pockets around the UK.
Yet, over the past 20 years, Greene King has been an acquisitive company, and has experienced rapid growth during that time.
A total of 20 deals have been made since 1999, with the largest of all coming at the end of 2015.
The pub industry itself has experienced major changes in the last decade, with the smoking ban entering into force in 2007 and the rise of the supermarket in the sale of beer and alcohol.
Davis describes the smoking ban as an event that “fundamentally changed the nature of the pub”, with pre-2007 data showing that 25% of UK consumers, and 75% of pubgoers, were smokers.So, with Brexit being the key driver of uncertainty across all industries, how is this CFO dealing with the UK’s exit from the EU?Davis isn’t panicking, but highlights that the consumer environment is one he has been closely monitoring, given that the pub industry is in part built on consumer sentiment.This has gone against the grain, with the previous 19 acquisitions resulting in closure of the acquired company’s office and movement of staffing positions to Bury St Edmunds.“If you’re running a national business it makes sense to have a support centre in the middle of the country and Burton is a more convenient location than Bury St Edmunds,” says Davis.Now, we could just stop at £35 million and get on with doing the day job, or there’s more there to harvest.So, we’ve got to make sure we harvest those extra benefits over the next two to three years and that will provide an important area of growth for the future. It may not come along at the right time, but we’ve been a very acquisitive company in the last 20 years with 20 deals. Cyber security is his top concern as CFO of Greene King.Kirk Davis joined Greene King as CFO in 2015 following key finance roles at JD Wetherspoon and Tesco.Tasked with unlocking the financial potential of the £774m acquisition of Spirit Pub Company in 2015, over the past two years he has been focused on building the best pub company in the UK. As well as working to align two separate cultures and teams following the acquisition, Davis has had to battle against government policies impacting the UK’s pub industry, and the wider implications of Brexit – namely consumer confidence.What are the next couple of roles you want to do over the next three to five years? ’” So, what does the future look like for Greene King, and are there future acquisitions on the horizon? “But for now we are firmly focused on maximising the benefits and full potential of the Spirit deal and making it a success.“What we’ve clearly articulated to the team and the market now is that our strategy is to be the best pub company in the UK, and when we say that we mean that it’s the best for our customers, the best for our team, the best for our communities and also best for our shareholders.