Greene King, the brewer and pub operator that sponsors England rugby union, said yesterday that it was maintaining its interim dividend, despite the worsening economic climate.

The company, which operates 2,500 pubs and brews Abbot Ale and Old Speckled Hen, said that despite “increasing and competing demands on our cash”, it had decided not to follow rivals such as Mitchells & Butlers and Punch Taverns and scrap the payout to shareholders. Rooney Anand, the chief executive of Greene King, said that the group had a strong balance sheet and was generating sufficient cash to continue investing in its pubs while paying a dividend.

The 209-year-old company reported a 15.2 per cent fall in pre-tax profits for the 24 weeks to October 19 to £60.7 million, from revenues broadly flat at £445.5 million. It said that it would maintain the interim dividend of 7.3p after comfortably meeting its debt obligations. Since the year-end the company has reduced its debt by £14 million to £1.5 billion and has restructured its borrowings so that there is no debt refinancing requirement until 2012. Mr Anand conceded, however, that trading conditions were “the toughest for a long time”, blaming weak consumer confidence as well as heavy discounting by off-licences and supermarkets. Higher fuel, energy and raw material costs also placed profit margins under “severe strain”, he said.

“I believe the environment will become even more challenging in the near-term as we are yet to see the full impact on discretionary spend of rising unemployment, increasing negative housing equity and continued high consumer debt levels,” he said. The managed pub division reported a 1.6 per cent decline in like-for-like sales in the first half, widening to 2 per cent for the first 30 weeks, which Mr Anand described as a robust performance, given the trading climate. Christmas bookings looked reasonable, he said, adding that “community pubs” could benefit from the shift away from “a hooley in town involving a taxi ride home”.

Shares in Greene King fell by 12p, or 3.13 per cent, to close at 371p yesterday.

JD Wetherspoon said that 200 jobs had been created after it invested £5 million in five new pubs. The outlets at Minehead, Bodmin, Doncaster, Oldham and Sutton will open next week and take its UK estate to 713 outlets. The chain has opened 20 new pubs since August.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts