Pub customers "responding positively" to smoking ban, says Punch boss

Punch Taverns' chief executive Giles Thorley said the UK-wide smoking ban had improved the environment of his group's pubs and customers were responding "positively" to the new regime.

Although he couldn't be specific on the number of pubs who contacted the group, he said "hundreds" of Punch retailers had said the ban was making their venues better places for consumers to visit.

"There are and will be short term challenges, certainly, but the long term picture is a good one," he said, adding that Punch's Scottish pubs had returned to growth some 15 months after the introduction of the ban there.

Thorley was speaking as Punch announced its full year results which saw overall turnover up 10 per cent to £1,705m, with pre-tax profits up 13 per cent to £282m, a figure slightly above analysts' expectations.

Average profit per leased pub was up 11 per cent, while core managed average profit was 15 per cent higher than last year.

Current trading saw the managed estate performing "broadly in line" with last year's sales levels, while the leased business was seeing growth trends following on from the second half of the financial year.

Analyst James Ainley of JP Morgan suggested this implied like-for-like growth of 2.3 per cent.

Thorley said that while there were certainly "short term challenges", the group was in the "best ever shape" and would capitalise on opportunities as they arose.

Going forward, Thorley said he anticipated margins across the managed estate would suffer as the sales mix shifted in response to the smoking ban, but that this was an industry-wide phenomenon.

While some in the City expect Punch to sell its managed business, Thorley said a sale was not on his agenda, although he said if the right offer came along he would consider it.

Punch was meanwhile maintaining its stance of not becoming a real estate investment trust. "Our tax cost is very low and we're under no pressure to go down this route," he said.

Thorley said that in partnership with the British Beer & Pub Association each of its pubs would undergo a risk assessment, looking at all aspects of the business from noise reduction through to customer safety.

"This is part of our effort to show the government that we and our pubs are responsible retailers and that pubs are the best places to consume alcohol," he said.

There would "no cost" to the exercise, he added. "It's just an aide memoire​ for our retailers."