Thorley: 300 hosts lined up to buy pubs

The number of individual Punch licensees who end up buying their pub is likely to end up well in excess of 300.

Punch wrote to its licensees in December last year offering them the chance to bid for the freehold of their own pub. Last month, Punch indicated that the number of pubs acquired by licensees up until that point had been just over 20.

But this morning, Punch said there were around 300 deals either complete or going through legals.

Two-thirds of the pubs sold are in the "turnaround" division with around one-third from the core estate.

Chief executive Giles Thorley told analysts that pubs in the tenanted division were selling for around 15 times Ebitda, a much higher multiple than the 9 times average Ebitda achieved overall.

Of disposals, Thorley said: "We want to maintain a strong and viable estate with good growth characteristics."

Punch also revealed that promising not to rentalise machine income, in line with the critical BEC report on pubco/tenant relationships, would cost in the region of £2m per annum. Thorley said, though, that the introduction of higher jackpot machines could ameliorate the potential losses.

He also told City analysts that the company would consider buying AWP units, as is allowed under the new legislation on machines, but that it was likely the company would continue to rent them.

The company said that there were still around 5% of the tenanted estate currently closed. Thorley also said there were around 100 to 150 pubs in its managed division that it would ultimately aim to sell — a figure higher by 50 than the last number indicated at half-year results.