Analyst tips ex-M&S man as Thorley successor

A City analyst has tipped former Marks & Spencer and De Vere executive Carl Leaver to replace Giles Thorley as Punch Taverns boss.

Nigel Parson at Evolution Securities tipped Leaver, one of the runners up from the Whitbread and Ladbrokes recruitment process as a possible replacement.

He added: "We would discount the reappearance of Tim Clarke.

"The timing of Thorley's departure is a surprise but is a necessary part of the rehabilitation of Punch Taverns.

"He has done enough to show a way out of the mess that Punch is in and the new chief executive can continue the reshaping of the business without the baggage that consumed Giles in the end.

"The new man can take a dispassionate view of the future of Spirit for example. We think there's sufficient value within the business to persevere with our buy recommendation (based on the value of the assets) despite the challenges that still remain ahead.

"We have always argued that issues are concentrated in the tail estates of the tenanted operators and disposal/recycling capital into debt is the recovery strategy."

Sell recommendation​

Meanwhile Greg Feehely and Wayne Brown at Altium Securities have a different view with a sell recommendation on the shares: "[Today's announcement] does highlight internal challenges that face the company aside from the external macro-factors that are impacting Punch's business model.

"The group has a significant amount of work to reposition its estate and address the continued weakness that faces its tenanted business.

"Whilst the business has concluded a significant amount of disposals during the past 12 months enabling it to upstream cash to the Plc, we feel this will have to continue in combination with a trading recovery in both its tenanted and Spirit managed estate to see a recovery in the group's profitability and more importantly cash flows.

"We are not changing our recommendation today and feel that better value exists in the licensed on-trade. We will revisit our forecasts at the times of the interims on April 22 but feel that risks are on the downside."