Punch reports trading improvements

Punch Taverns has reported an improved performance in both its managed and tenanted pub divisions for the 12 weeks to 28 May, with the company citing good weather, continued investment and focus on its operations.

Sales in the managed arm were up 7.3%, against a 5.7% rise across the 40 weeks to 28 May, with food sales up 8.4% (40 weeks: 7%) and drink sales up 7.3% (40 weeks: 5%).

In Punch's leased division, like-for-like net income was down 3.3% over the period, although this compares to a 5.8% decline across the 40 weeks. Average net income per pub was up 1.3% for the 40 weeks.

The company said: "The Spirit managed business has delivered another quarter of strong sales growth.

"Whilst good weather has undoubtedly helped trading, our focus on operational excellence and continued investment in the estate has again seen us outperform the market. Uninvested pub sales grew by 3.5% in the period."

Like-for-like net income for the 552 leased pubs in the Spirit debenture was down 0.7%, against a 3.9% decline across the 40 weeks. Punch said it has begun converting some of these pubs to its managed brands.

Punch refurbished 160 managed pubs in the period, focused on its Chef & Brewer, Fayre & Square and Flaming Grill brands.

The company added: "The Pathway to Partnership programme [in the leased estate] continues to deliver benefits with the rate of like-for-like decline improving again. Our ongoing disposal programme, together with improved like-for-like trends, has resulted in growth in net income per pub of 1.3%."

Turnaround division​

Meanwhile, the firm said reorganisations of its field operations divisions to create the Core and Turnaround divisions within Punch, and to separate the Spirit leased division, has been completed.

"This has resulted in a number of transfers between the Core and Turnaround divisions but the overall number of pubs in each remains in line with the figures announced previously.

"As at 28 May, there were 2,956 pubs in the Core division, and 2,182 pubs in the Turnaround division."

In addition, Punch has announced that Roddy Murray has decided not to take up the role of finance director designate for Spirit. Russell Margerrison, who is currently group business planning director and has been leading the operational separation of the business for the demerger plan, will assume the role of interim finance director of Spirit.

Demerger progress​

The company said "good progress" is being made on the demerger of the leased and managed arms, "which we expect to complete by the end of the summer".

Ian Dyson, chief executive of Punch, said: "We are pleased that our operational initiatives continue to translate into improved performance for both Spirit and Punch. This has been achieved during a period of substantial change as we prepare for the proposed demerger of Spirit.

"Despite the challenging UK consumer environment we are on track to meet our full year expectations."