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Garrood defends negative impact on Punch’s letting activity

By Nikkie Sutton , 10-Nov-2016

Lettings activity: Garrood has defended the pubco’s financial results
Lettings activity: Garrood has defended the pubco’s financial results

Punch CEO Duncan Garrood has defended the negative impact on the pubco’s letting activity following the release of its figures for the first half of the financial year.

He put the fall in numbers down to the introduction of the pubs code  in July, which meant a “change in the administration of the lettings system”.

Garrood told The Morning Advertiser (MA): “Because the legislation went live the day it was passed in parliament, it meant there wasn’t a ‘bedding in’ period.

“We stopped all the letting that was in process up until the point of the legislation going live and started it all again under the new process."

Compliant with code

He added: “Therefore, all that’s happened is there has been a gap in our normal ongoing lettings process simply because we started it again.

“Even those that were very advanced under the old system, unless someone had already signed, we didn’t go ahead and sign them – we cancelled it and started the process again to make sure we were 100% compliant with the pubs code.”

He added that, as a result of the lettings process starting again, there was a gap in Punch's normal ongoing lettings programme but reassured operators once the lettings are agreed, the figures will “catch up”.

The MA’s sister publication MCA reported Punch also revealed 40 licensees have asked what the difference in costs would be if they decided to take the market rent-only option (MRO) since the pubs code came into force.

Bright future

Garrood added it was hard to say what the future looked like in terms of operators taking up the MRO option.

He said: “Our feeling is, the majority of publicans will find the tied model is best for them. There are high levels of support, a greater amount of variable costs and a reduced amount of fixed costs.”

The Punch boss concluded: “The great British pub has a very bright future and if we take our responsibilities to deliver quality to consumers, those consumers will stick with us for generations to come, just as they have done in the past.”

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