Punch abandons focus on food revenue

By James Wallin, M&C Report

- Last updated on GMT

Related tags Like-for-like net income Public house Income

Stephen Billingham stressed that with the restructure completed Punch was fully focused on 'transforming to a higher quality estate'
Stephen Billingham stressed that with the restructure completed Punch was fully focused on 'transforming to a higher quality estate'
Punch Taverns executive chairman Stephen Billingham said the company has abandoned its target of food sales making up 35% of its tenants’ revenue.

Billingham was speaking to investors following the announcement of Punch’s preliminary results to 23 August 2014, which showed 1.3% rise in like-for-like net income across its 2,925-strong core estate.

He said the company was delivering the business plan “with steady progress in all areas” but admitted the target set last September for food sales growth was no longer being pursued. He said the success of its 12-strong wet-led community local model, Mighty Local, had been a factor in the decision.

In his presentation, Billingham stressed that with the restructure completed Punch was fully focused on “transforming to a higher quality estate”, with non-core pubs now representing fewer than a quarter of the total estate. He also presented graphs showing Punch’s revenue per pub up to £112,000 — equal to that of Enterprise Inns (as of September 2013), while the core estate figure was up to £128,000.

He said that after realising £111m of disposal proceeds from pub sales in the 2014 financial year, the company was on track to deliver in excess of £60m for 2015 with £43m already realised in the first 10 weeks.

Estates

Pubs remaining in the non-core estate are managed under three categories, with 403 earmarked to be protected; 270 in the ‘sell later’ category and 211 being actively marketed.

Of the pubs in its core estate, 37% have now benefited from an investment of more than £40,000 in the past five years. Billingham said he was confident the company would reach its target of 65%.

Billingham said Punch had made a positive start to the new financial year with its core estate in like-for-like net income growth of 0.8% and realised £43m of proceeds from the sale of non-core and gold-brick sites.

EBITDA for the 53 weeks to 23 August stood at £205m (2013: £216m), while pre-tax profit stood at £69m, including £30m of profits attributable to first half year bond purchases (2013: £49m; no profits attributable to bond purchases).

Related topics Punch Pubs & Co

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