How Punch Pubs is winning each round

By Rebecca Weller

- Last updated on GMT

Punch Pubs: The MA looks at the pubco's activity from the last year
Punch Pubs: The MA looks at the pubco's activity from the last year

Related tags P Franco Finance Multi-site pub operators

Punch Pubs & Co has had a busy few months as it executes its plan to scale up the business, in particular its managed estate.

As the group looks to the future and expands, The Morning Advertiser (MA​) has taken a look back at the past 12-months’ of Punch trading updates and M&A activity​.

May 2023

Punch​ announced a boost in total revenue to £158.1m for the 28 weeks to 26 February 2023, compared to £142.6m during the same the previous year.

However, the group’s profit was £1.9m for the half-year (H1) period versus £5.2m for the same period ended 27 February 2022.

At the time, Punch said the increase in revenue had been helped by the company converting 71 pubs from its leased & tenanted division to its managed estate as well as the temporary reduction to VAT on food and non-alcoholic drinks in H1 2022.

Each of the pubco’s​ three divisions (Leased and Tenanted (L&T), Management Partnership and Laine) delivered like-for-like sales growth for the 28-week period when compared to 2022, while L&T also delivered growth in like-for-like rental income.

During H1 2023, the group spent £16.7m (£15.5m: H1 2022) on expansionary and maintenance capital, which included converting pubs from L&T to Management Partnerships and acquiring a brewery to expand its beer production capacity at Laine.

Read more here​.

August 2023

In August last year, the Burton-upon-Trent firm, which operates around 1,300 sites in England, Scotland and Wales, increased its like-for-like revenue by £22.6m for the 40-week period to 21 May 2023.

The operator said total revenue was £233.9m for the three quarters of its 2023 financial year (FY23) compared to £211.3m in the same period of FY22, with the conversion of pubs from its Leased & Tenanted division to its Management Partnerships estate having contributed to the increased revenue.

Punch added all three of its divisions like-for-like sales growth for the 40-week period when compared to the prior year.

In addition, £23.6m had been spent on expansionary and maintenance capital during the first three quarters versus £21.6m in the period in the prior year.

During the 12-week period to 21 May 2023 (Q3) total revenue was £75.8m compared to £68.7m in Q3 FY22.

Read more here​.

October 2023

Moving to October last year, Punch cited its move to convert its L&T pubs to its managed division as the “predominant driving force” behind the 10.2% revenue lift during the 52-weeks to August 2023.

In the trading update, the group detailed total revenue at the business stood at £313.5m compared to £284.4m the prior year for the 52 weeks to 14 August 2022.

Meanwhile revenue at its managed division – Management Partnership –increased by 24 % from £112.8m to £139.8m, with like-for-like sales up across all three divisions.  

The group disposed of 23 pubs in FY23, generating proceeds of £11.2m, at £0.6m above book value.

Read more here​.

February 2024

As we entered the new year, Punch announced the businesses performance had “remained strong” for the first quarter of the financial year.

The operator said total revenue for the 16-week period to 3 December 2023 was £96.0m, compared to £92.0m in the prior year period of 16 weeks to 4 December 2022.

All three of its divisions delivered like-for-like sales growth for the 16-week period when compared to the prior year as well and the group delivered £25.6m of underlying EBITDA for Q1 versus £23.9m in the previous year’s Q1 period.

Profit before taxation was £6.8m for the period versus £3.2m in the equivalent 16 weeks a year prior and the business injected £7.7m of capex investment into its pubs during the quarter, which was down from the same period in 2023 (£11.5m).

The group raised £4.1m from the disposal of seven sites in the period, with property assets increasing by £1.0m to £894.0m (13 August 2023: £893.0m).

In the trading update, Punch said: “Having converted 71 pubs from L&T across to the MP division since August 2021, the rate of pub conversions has slowed down as we take time to select and build the next pipeline of pubs for transformational investment and conversion, taking learnings from the successful conversions we have completed to date.”

Read more here​.

March 2024

The group reopened the Castle Inn pub​ in Congleton, Cheshire, following a joint £160k investment to refresh the venue.

April 2024

Looking to April this year, the group added a trio of Leicestershire pubs to its L&T division.

Acquired from Steamin’ Billy, the Dog & Gun in Syston, the White Bear in Hinckley and the Horse & Trumpet in Sileby joined Punch’s 900 L&T sites, with a “strong pipeline” of acquisitions across the Midlands region also on the horizon. Read more here​.

On top of this, the pubco also procured a 24-pub strong portfolio in the North​ East from Milton 3 for around £17m.

Regarding the acquisition, CEO Clive Chesser said: “We are delighted to have acquired these excellent pubs and we are excited about the future as we welcome them into the Punch family.

“We are looking forward to providing further updates as our plans progress.”

May 2024

This month has proved another busy period for Punch, with the acquisition of a further two sites.

First to be secured was the Ship in Oundle, Northamptonshire, which will undergo a planned investment in the coming months.

After being acquired from the Langridge family, who operated the business for more than four decades, Punch multiple operators Ami Sanobar and Darren Paul have taken the reins at the Ship.

Secondly, the independent pubco took on the White Lion pub in Long Eaton, Derbyshire, which Sanobar and Paul will also be at the helm of.

The group also opened a new cocktail bar in Cheshire​, the Bench Bistro, following a £200k joint investment.

In addition, Punch announced total revenue for Q2 2024, across the 28 weeks to February this year, stood at £165.1m compared to £158.1m for the same period in 2023, with £13.3m spent on expansionary and maintenance capital as well as improvements to energy efficiency.

The group said: “We have identified the next tranche of pubs to convert to the MP model, having identified a population of up to 70 pubs that would be suitable for conversion. With conversion phased progressively over a three-year period.”

Read more here​.

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