Punch tenant earnings up 11%

23-Apr-2008 - Last updated on 11-Mar-2017 at 19:12 GMT

The average Punch tenant makes a profit of £40,000 a year, pubco says

The average Punch tenant makes a profit of £40,000 a year - 11% up on last year.

Punch said that it had carried out 235 rent reviews with an average increase of 6% and 156 lease renewals with an average rent increase of 14% in the 28 weeks to 1 March.

Contribution from the leased estate fell 2% on last year and sales in the managed division were down 2.8% during the period.

There were 270 lease assignments carried out at an average premium of £72,000 and the pubco said that a more diverse group of people were being attracted to the industry since the smoking ban.

It said it had invested £46m in capital development schemes alongside its licensees and its system of support had helped cope with the changes since the smoking ban.

"We are continuing to support our licensees where appropriate through the use of rent concessions, specific beer discounting schemes and promotional support," the statement said.

"Whilst the level of rent concessions has increased in the period, they still represent less than 2% of the total rent roll."

Profits

Punch reported a 1% rise in profit before tax of £133m for the period with average EBITDA per leased pub up 10% and 4% in the Spirit managed division.

The weekly take per managed Spirit Group pub has risen from £13,000 to £16,000 a week since its acquisiition in January 2006.

Food sales have increased to 39% of turnover in the core managed estate.

"This strong performance has been achieved despite a weaker trading environment across the industry," said chief executive Giles Thorley (pictured).

"Measured on both a company EBITDA per pub basis and licensee profitability metrics our estate is of significantly higher quality than this time last year.

"Whilst we remain cautious over short-term trading conditions for the sector, we are confident that we are well positioned as we move into a more positive environment over the summer months and pass the anniversary of the smoking bans in England and Wales."

Meanwhile, Punch said it was continuing talks with Revenue and Customs about the possibility of a pubco converting to the tax-efficient Real Estate Investment Trust (REIT) status.