Punch reports 'strong trading' with £241.5m revenue
In its interim trading update, the Staffordshire-based firm, which operates around 1,250 pubs across the UK, reported total revenue had risen to £241.5m during the 40 weeks, up from £233.9m the previous year.
All three divisions (Leased and Tenanted, Management Partnership and Laine) delivered like-for-like sales growth for the reported period when compared to 2023.
Underlying EBITDA (earnings before interest, taxes, depreciation, and amortisation) for the pub estates before central costs was up by 9%, increasing by £7.4m to £86.3m.
Meanwhile underlying EBITDA for the 52 weeks to 19 May 2024 stood at £87.1m compared to the £76m of Adjusted Underlying EBITDA from the wider Punch Group in the year to August 2019.
The group generated a net cash inflow from operating activities for the 40-weeks of £62.3m, up from £58.2m during the equivalent period last year.
Financial resources
An interim dividend of £20.6m for the current financial year ending 11 August 2024 was also recorded with no further dividend payments proposed for this financial year.
Punch spent £20.6m on expansionary and maintenance capital during the 40-week period, compared with £23.6m the prior year, including improvements to energy efficiency.
This included the acquisition of 24 pubs from Milton 3, which have all been converted to the leased and tenanted format with a view to adapt approximately a third of the sites to the management partnerships division over the next 12 months.
Punch also detailed it had £56.9m in available financial resources, represented by £1m of cash and cash equivalents, £41.5m undrawn against the revolving credit facility and £14.4m from freehold pub acquisitions.
Unaudited drink revenue was estimated to have increased from £67.6m to £70.2m across the firm’s leased and tenanted estate, from £73.9m to £82.7m for its management partnership arm and from £34.3m to £34.5m for Laine.
Additionally, unaudited year-on-year food revenue was reported to have risen from £21.7m to £22.4m for its management partnership sites, though dry sales fell from £2.9m to £2.7m for Laine pubs.
Improving margins
The report added the period included the “benefit” of the Euros 2024 tournament, which saw Punch’s management partnership estate record its “highest ever sales day” during the final on Sunday 14 June, when England played Spain.
It continued: “Trading to date has been encouraging with profitability ahead of the prior year.
“Strong trading during the Euros helped offset weaker trading from negative weather comparatives versus last year.
“The group expects to continue to benefit from inflation positively impacting Leased and Tenanted net income together with the improving margins and the benefit of maturing sales and profitability in the pubs converted to the Management Partnership estate since August 2021.”
Earlier this year, Punch recorded “encouraging” growth for Q2 2024, posting revenue of £165.1m for the quarter.
The Morning Advertiser (MA) also recently look backed at the group’s M&A activity in the year to May 2024. Read more here.
