Punch: leased and managed divisions stable
Punch Taverns has reported that it has stabilised performance in both its leased and managed division for the 40 weeks to 30 May.
Like-for-like EBITDA for the 40 weeks was down 11.2%, of a similar level to that reported for the 28 weeks to 7 March 2009.
The company said: "Trading performance continues to be impacted by a combination of weaker beer volumes and a softening in rents, coupled with the previously reported increase in the levels of licensee support.
"In this difficult economic environment, we continue to believe it is important to proactively support our licensees in the form of rent concessions and increased product discounts.
"Levels of financial support have remained relatively steady for the past 6 months, with an average of £1.6 million in the year to date, up from an average of circa £0.5 million per month a year ago."
Punch said that management actions in its managed division have been focused on stabilising business performance, principally through a strengthening of value propositions and improved food menus across all sectors underpinned by the rollout of its new Operational Excellence programme.
The company added: "Emphasis has been placed on trading the business more actively through heightened promotional activity which has been designed to grow sales and margin.
Business performance has started to see a measure of improvement with like for like sales for the 40 weeks ended 30 May down by 1.2%, continuing the improving trend across the year with third quarter sales being 1.0% up on the same period of last year.
"As detailed at the time of our interim results announcement, operating margins continue to be impacted by above inflation regulatory, food and energy cost increases together with promotional discounts to drive sales. However, due to our improved trading performance and tighter cost control, operating margin for the year to date is estimated to be down by 3.5% compared to being down 4.0% at the half year."
