Punch sees stronger Q2 but like-for-like income still down

MIDLANDS pubco Punch Taverns has said second quarter trading has been in line with expectations despite the severe weather in January.

It said in the 12 weeks to March 2 like-for-like net income was down 3.5% in the core estate but this was an improvement on the 5.2% decline seen in the first quarter.

The group said it expected the second half of the year would benefit from the recent improvements made in the letting, investment and food development operations, and the increased field team support.

It has predicted it remains on track to meet full year profit expectations.

The percentage of core pubs on substantive agreements remains strong at 94% and is in line with a target of having between 93% and 95% of the core estate on substantive agreements. It said the launch of the new Partner recruitment website had been extremely well received having attracted around 1,200 enquiries in the last three months, helping support a further 10% growth in applicant numbers.

The increased level of activity in pub investment seen in the final quarter of 2012 has continued into the first half of the year and it has invested in 270 core pubs at an average spend of around £100k per pub.  

“This investment is transforming the customer offer in these pubs and the associated trading uplift is expected in the second half of the year.  We also benefited from a shift towards food which is now estimated to make up 25% of Partner revenue across the core estate, up 2.4% pts from March 2012,” it said.

 The group’s disposal programme is slightly ahead of our target to realise £105m in the current financial year.  During the half year it sold 164 pubs (including 21 pubs from the core estate), together with other assets which brought in £55m, slightly ahead of book value.

Stephen Billingham, Executive Chairman, said: “Our profit performance for the first half of the year has been in line with management expectations, with improving trends in the underlying business.  
 
“We have strong plans in place to return the core estate to growth in the medium-term.  We expect to make further progress in the second half of the financial year and are on track to meet our full year profit expectations.
 
“We are encouraged by the progress we are making in our discussions with stakeholders on our capital restructuring proposal and believe a consensual restructuring can be launched in the first half of 2013.”