40 Punch licensees request MRO statistics

The company revealed the numbers as it announced its performance for the financial year to 20 August, which saw EBITDA (earnings before interest, tax, depreciation and amortisation) fall 9% to £178m, reflecting a £324m disposal programme over the past two years.

The company said the pubs code had negatively impacted letting activity in the first half of the new financial year but it had identified ways to reduce the letting process.

MRO requests​

Of the MRO requests so far, 21 are currently under review, with the remainder having been either concluded under a tied rent review or renewal, or lapsed.

Punch reiterated that approximately two thirds of its core estate pubs do not have a rent review MRO trigger event before the end of their agreement. Tied leases with five years remaining on their lease at the next rent review represent about 26% (roughly 660 pubs) of the core estate, while tied leases with 10 or more years remaining on their lease represent about 7% (around 170 pubs) of the core estate.

The group said: “While it remains early days with the new legislation, the take-up of the MRO option will become clearer with time through the cycle of five yearly rent reviews and renewals. Our expectations, and early indications are, that the majority of publicans will continue to operate under, and enjoy the benefits of the tied-drinks model.”

Meanwhile, the results revealed average profits per pub was up 4% across the estate with analysts pointing to the fact those figures were boosted by the disposal of non-core pubs. Overall, like-for-like net income growth of the core estate stood at 1%.

Non-core estate​

Adding in pubs transferred into the Mercury division brings the like-for-like net income growth down to 0.2%. The company also said the division, which was formed earlier this year, predominantly from its former non-core estate, was on target to deliver like-for-like growth from the end of 2017.

Punch once again upped its target for the roll out of its Retail contract, with 242 pubs now, of which 109 are already operating. It reiterated its belief that the division can grow by up to 150 pubs a year.

The group said it was also pleased with the progress of its retail concepts, with 47 pubs currently operating under four formats - ‘Mighty Local’ community drinks led pubs, ‘Champs’ sports bar, ‘Signature’ managed house and ‘Village Pub & Kitchen’ community drink and food-led pubs.