Rent concessions rise at Punch Taverns
Punch Taverns, the UK's largest pub operator, has had to increase the number of rent concessions it offers its licensees as market conditions tighten.
Reporting half year profits in line with market forecasts, Punch admitted its retailers were being offered more support in the current trading environment.
Noting what it described as "challenging market conditions", Punch said while the majority of its licensees had coped well, "some pubs have taken more time to adapt".
"We are continuing to support our licensees where appropriate through the use of rent concessions, specific beer discounting schemes and promotional support," the group said.
"Whilst the level of rent concessions has increased in the period, they still represent less than two per cent of the total rent roll."
Announcing results for the 28 weeks to March 1 2008, Punch said that following a satisfactory start to the financial year, trading in the second quarter was "more subdued", a trait continued into the third quarter, although the group said it expected trading comparatives to improve in summer trading.
Pre-tax profits of £133m for the 28 week period were generated across an estate of 8,500 pubs, nine per cent fewer that the same period last year.
Turnover reflected the smaller estate size, down 11.7 per cent at £813.5m for the period.
Punch's leased estate average pub EBITDA rose 10 per cent, while its managed estate saw average EBITDA up four per cent.
The group said it had a "higher quality estate than this time last year" and "secure finances".
It called on the government to do more to "safeguard the future of the local pub at the heart of our communities, rather than penalising responsible pub goers and licensees" - and also offered its support to ban Chancellor of the Exchequer Alistair Darling "from every pub in the land".
The results statement made no mention of Mitchells & Butlers' move to buy Spirit Group, Punch's managed operation. The group did however state categorically that Spirit "remained a core part" of its business, seeming to confirm a message sent to its rival last week that the operation was not for sale.
