The ‘non-core’ pubs are likely to be sold at around 100 a year for the next four years, but pubs are unlikely to be ‘packaged up’ in deals reminiscent of last year’s sale of 158 sites to New River Retail.
“We have completed the disposals we had to make to pay down our debt,” Garrood explained.
“We are going to continue to dispose of the 400 non-core pubs at around about 100 a year, but that’s not pay down debt, it’s for capital investments. I don’t see any big deals.”
Pubs are likely to be sold to small multiple operators and to individuals.
“If someone came for a large package - I would never say never, but we don’t anticipate it,” he added.
Pubs code
Punch will also be forced to be ‘much more open’ about the pubs being sold due to the incoming pubs code, Garrood explained.
Licensees had complained to the Morning Advertiser about being unaware of the pubco’s intention to sell them until close to the date.
But Garrood, who has just completed his first year in the industry, welcomed a new relationship between licensees and pubcos which the code aims to assist.
Passion and resolve
“If you look from the outside and see the amount of passion, energy and resolve people have had to change things, and spend fighting each other, it is like nothing I’ve seen anywhere else in any other industry,” he said.
“My hope is all of us are mature enough to say ‘we are done with that, a new start is here’. Let’s work positively together to convince the Great British public to use the Great British pub more.”
Garood explained Punch formerly had two groups of pubs – 'core' and 'turnaround'. The chief executive admitted the latter were mainly pubs it planned to sell.
Bizarre
“We found the pubs in that group actually started to perform in like-for-like volume better than the core estate, which was quite bizarre,” he continued.
“We were managing them on a much more hands on basis than the core estate.”
Punch decided to bring a further 240 pubs into its turnaround division and rename it Mercury. Mercury pubs are visited twice as often by Punch and have a greater ratio of area managers.
Permanent
“This is a permanent division, not a parking place for selling pubs,” Garrood said.
“We are now investing in some of these pubs, and in the past we wouldn’t because we were going to sell them. They’re smaller, targeted investments like cleaning up toilets, bar, fixtures and fittings, carpets.
"For small amounts of money we are seeing some amazing changes in performance.”
Transformation
Some of the smaller investments have seen staggering improvements. At The Stag Inn in Huddersfield, Punch spent just £7,000, and the pub has delivered an 80% uplift in sales.
“If you give a bit of love and a bit of money and attention, and work together with a publican, you can make a load of difference.
"You feel differently about running your pub if the owner says ‘I’m going to spend a bit of money with you, and you’ll manage it’.
“The results give us confidence that this division will deliver us growth. We’re much more focused on what can happen locally than big processes of approval and corporate stuff, it’s just go and get on with it.”
Optimism
Punch is also placing more focus on its turnover-related agreement Falcon, which is set to grow from 70 to 100 sites this year.
“When I look at the estate overall, with Mercury and Falcon, I feel a high degree of optimism about how the industry will look in years to come and how the relationship between pubcos and publicans will be,” Garrood added.