Mr Punch shows the way to do it

Google "Giles Thorley" and the search results range from the usual stuff on Punch Taverns through to disgruntled retailers venting their collective spleens on the subject of rising pub rents and the beer tie.

Thorley, like Ted Tuppen over at Enterprise Inns, personifies the company he heads, which means when things go well the 39 year-old executive reaps the rewards. Conversely when people take a pop at the UK's largest pub operator he's truly in the firing line.

The former investment banker-turned pubco boss seems to defy those who expect him to fail; thus far the cards appear to have fallen kindly.

But having overseen Punch grow with acquisitions such as the Pubmaster and InnSpired estates, the purchase of Spirit Group - £2.7bn for 1,800-plus pubs - threw a harsh spotlight on the company, as it meant reverting to the managed/leased pub model of old.

Buying Spirit was described in some quarters as audacious, though others called it unrealistic, while the subsequent churning of the estate has had observers pondering how Punch persuaded buyers to cough up quite so much for a bunch of tail-end pubs.

The idea of running a large managed pub company alongside a leased business the size of Punch's is certainly one that attracts controversy. But Thorley argues the market was wrong in its valuation of the constituent parts of the business.

"There were, and still are, those who say 'managed good/leased bad' and others who adopt the opposite view," he says.

"There was a perception that one was the best way to move forward and the other wasn't. The fact is they are both pretty good.

"Most people have associated managed houses recently as portfolios of high street leaseholds, and actually there is a very big market out there of very high-quality freeholds that are just bigger versions of what we do every day of the week."

Synergies in areas such as financing drive such deals. "If we'd just bought a portfolio of managed pubs, say 300, with no management, no infrastructure, no head office, then I think that would have been much more risky. But we bought the whole infrastructure."

With Punch busy with integration, few people expect the group to go out and acquire right now. They may be underestimating the group here, although Thorley says an estate's size matters less than its quality.

"I measure our success by the success of the relationships we have, by the quality of the service we provide. We want to be the best operator in the business and I don't care if we have 400 pubs or 9,000. It doesn't measure anything."

Size wise the group doesn't have any aspirations materially above 10,000 pubs, he says - it currently has just over 9,000. "It's not going to get much bigger in terms of numbers of pubs. But it could get bigger in terms of the quality of pubs, so there will be churn opportunities.

"Most of the bigger pubs are currently likely to be managed, hence the need for a managed infrastructure, though not all of them will necessarily stay as managed pubs. It's got to fit the simplicity criteria of the pubs we've kept thus far, and if it doesn't then it doesn't interest us."

A much more important barometer is the average quality of the group's pubs, which he argues has been improving "dramatically".

"The pub portfolios we've bought, even where they were smaller in terms of profitability or whatever measure you want to use, have since risen quite steadily," he says.

Average EBITDA per pub among the recently acquired estates - InnSpired and Avebury - has certainly outpaced the core Punch estate in recent months, despite slower turnover growth.

Like the group he leads, Thorley doesn't have it all his own way, however. Pub traditionalists pillory him for what they see as the carpet-bagging of the nation's pub culture, while others reckon that Punch has been more on the ball when it comes to managing its profile than operating its estate as well as it could.

Thorley, a self-confessed fan of the British pub, dismisses the suggestion the group has done a good PR job in recent times. "I think we've done a good job, period.

"We've built up a reputation as the best operated leased and tenanted pub operator in the marketplace. And we've done a lot of stuff in the past 18 months, whether it's been our work leading up to the new licensing arrangements, or our investment programmes. That's not to say there isn't more to do. God forbid we run out of ideas."

Meanwhile, the debate over the relationship between pub company and retailer rolls on. Thorley is shrewdly diplomatic on the subject: "I think we get it right with most, but I don't think we get it right all the time. But then I don't think we're doing any better or worse than was the case in the past; it's a different relationship.

"If you wanted to have a franchised beer sales unit, the pre-beer orders days were brilliant. Nowadays, you've got much more freedom to run a business as you see fit, but with that comes a degree of higher risk and responsibility. We try to mitigate some of those risks, but we can't mitigate them all."

If the experience doesn't work for either party, that's when things hit a wall, Thorley says. "Ultimately we want the pubs to be operating to their ultimate potential. Very few people believe they can make a successful career out of things by simply plodding along. Not many people get incredibly lucky doing nothing."

And what of Thorley himself? He hasn't exactly "plodded" along on his own career path. Some believed he would leave the industry if the Spirit deal had fallen through, so how long is he likely to stick around now?

"Not forever, 12 to 18 months maybe," he says. "There probably are more deals out there, but I don't build my career plan on the basis of 'oh, I've got five deals [lined up], I've got to do those five deals'.

"You don't build your whole business on getting one particular deal because you'll be sorely disappointed. But there's plenty to do and I've got a great management team around me."

With such a successful career already in the bag it's tempting to ask if he was crap at anything while at school.

"I was OK, but not good. I was never captain of any of the school sports' teams, apart from the swimming team, but that was no big deal."

Despite attending Hereford Cathedral School - where he dreamt of either being a "sailing instructor or a Jedi Knight" when he grew up - Thorley never made the choir, although with some imagination one can envisage him wearing a cassock and hitting the high notes.

As for a pub-free future, Thorley can afford to pick his route. "I've been very lucky to have been involved in things I'm really interested in."

This includes a stint on the board of Italian motorbike manufacturer Ducati, although despite a go at riding the company's range of high-performance motorbikes, two wheels come lower down his interest list than four, apparently.

For now, pubs are where it's at. "The thing about being in this business is I genuinely do like pubs.

I don't want to give up my involvement in the sector until I've well and truly exhausted it and/or to the point where I get bored. That would be worse for the company. And I'm not bored yet."

Bad news maybe for pub traditionalists, who can look forward to spitting rocks for a year or more, but Punch shareholders will be anticipating a remunerative future.