Spirit to bolster leased pubs as performance declines
BURTON-based Spirit Pub Company has seen continued sales growth during its third quarter and it remains on course to meet full year expectations.
The company, created following its demerger with Punch Taverns, said its focus remained on maximising sales in its managed pubs and stabilising the performance of its leased pubs, which declined by 8% during the quarter.
The group took control of the leased estate at the start of the quarter and it said its new management team was making progress turning around performance.
The proportion of pubs on a substantive agreement has increased by 3% from the half year to 87% and it has significantly reduced discounts and concessions to its licensees.
However, it said the process of stabilising income was taking time, describing the quarter as “challenging” when set against strong trading comparatives and the impact of current year rent rebasing.
A full leased estate review has been completed and identified up to 100 underperforming pubs; 27 have already been disposed of and 10 converted to managed outlets.
In a third quarter trading update covering the 12 weeks to May 26, the firm said like-for-like sales in its managed pubs increased by 3.7% and was up 5% for the first 40 weeks of the year. Food sales grew 6.8% and drink sales 1.1%.
“Our managed pubs division delivered another quarter of good growth against tough prior year comparatives with drink sales growth especially impacted by the warm weather and additional bank holiday in April 2011,” said the statement.
“We continue to significantly outperform the market and remain pleased by the continuation of our strong food sales growth which reflects the ongoing evolution of our offer across our managed brands.”
It said its investment programme in the managed estate was proceeding as planned, with money spent on a further 21 pubs during the quarter. This took the total for the current financial year to date to 177. The total proportion of the managed estate invested and branded is now 79%.
It said there would be minimal investment activity in the final quarter as it looked to focus on the profitability of its pubs during what is expected to be a strong trading period.
Having completed the Taylor Walker and Chef & Brewer brands, it said it was now close to completing the refurbishment of the Fayre & Square and Flaming Grill brands and intended to complete the investment in its John Barras and Original Pub Company brands during next financial year.
Mike Tye, Chief Executive, said: “We have delivered another quarter of good growth against a very strong trading period last year. Continued innovation and investment in our managed estate, people and brands has enabled us to once again to significantly outperform the market.
“Our focus is now on maximising sales in our managed pubs during what promises to be a busy summer and stabilising performance in our leased estate. Whilst the consumer environment remains uncertain, we are confident in making further progress this year and remain on track to deliver our full year expectations.”
