Punch signals £80m investment in its ‘agile’ estate
Having around 1,300 pubs in the company, and being privately-owned by Vine Acquisitions, meant the operator could now focus on the future of its estate on a pub-by-pub basis, said Chesser at MCA’s Tenanted Pub Company Summit last month.
On coming into the business last year from Greene King, Chesser said: “I found the [Punch] business had been through a year or two of intensive change [following the transfer of 1,900 pubs to Star Pubs & Bars] and before then it was a story of growth.
“I expected a tray full of problems when I arrived, but I didn’t get that, so when I arrived I came to a clean desk and was able to say what we’re doing next is focusing on growth and starting a new plan.”
A small estate
Having a smaller estate allowed future plans to be stripped back, he said, adding: “We’re small and agile. When Punch had 7,000 pubs it was a machine, but now we can run it on a pub-by-pub basis.”
He continued: “Our vision we created was about being the most inspiring start-up business, to connect pubs with people and then the possibilities that come out of that are endless.”
Many of the remaining pubs in the chain had been underinvested in, with Chesser saying that was a catalyst as there was a great deal of opportunity to be had by investing in the business.
A transformational investment plan of £30m for a number of sites this financial year had more than doubled compared with the previous period.
After ditching so many sites there had been a quiet period in terms of acquisitions, however, plans were afoot to acquire new venues, after the pubco made its first purchase from Stonegate in 2018. It had also acquired Laine Pub Co.
Looking at investments
When looking at sites, Punch will buy those that “bring in quality, that can improve the performance of the business”, added Chesser.
There were six ways of working with new and existing sites, which all required different levels of management.
Starting with those needing more focus from Punch, the frameworks are: managed, franchised, retail agreement, turnover agreement, and tenancies and leases, which required the least amount of oversight.
“We’re interested in all of those areas,” explained Chesser. “We develop concepts within the retail agreements, they’re loose and not brands and we would also like some more turnover agreements.
“We’re very flexible and open minded and don’t go into the market saying ‘this must be like this’.”
The acquisition of Laine would not see Punch integrate brewing into its business, with plans to keep the running of the brewery independent.
