Spirit revived by good weather as pub sales pick up
BURTON-based pubco Spirit has said turnover within its leased estate is now back in growth and set for a stable end to the financial year – provided the weather is kind to the business.
In an interim management statement for the 12 weeks to May 25, 2013, the company said the bitterly cold and prolonged winter had impacted badly on the six weeks to April 13 with like-for-like net sales down 3.8%, food down 0.3% and drink sales declined 7.6% over the same period.
The pick-up in the weather marked an improved performance for the subsequent six weeks to May 25 with net sales up 2.6%, food up 4.4% and drink sales rose 0.2%. For the 12 weeks as a whole, net sales rose 0.7%, food sales 2.1% and drink sales were down 1.7%.
It said its focus now was on developing compelling brands and improving workforce skills to drive footfall.
“These goals continue to be supported by our disciplined approach to capital investment, with 64 pubs now invested in this financial year and return on investment remaining strong. We have also built three new Wacky Warehouses and extended two of our pubs as we seek to capture opportunities to maximise income and enhance value within our existing estate,” it said.
Within its leased division the 40 weeks to May 25 show an overall decline of 1.8% in net turnover. However, the four weeks to May 25 showed turnover increasing 1.2% and the company said it expected this would be the pattern for the remainder of the financial year.
Like-for-like net income declined 3.1% for the 40 weeks to May 25 – a situation the company has blamed on the bad weather. The four weeks to May 25 showed a slight improvement on performance with net income down 2%.
It said 2% decline reflected the last phase of its rent rebasing process.
“We remain confident of returning the Leased estate to stable like-for-like net income in the fourth quarter,” it added.
To support future growth, it has invested in 60 pubs in the year to date. With performance remaining encouraging it has identified further pubs for conversion to a new operating model, which is expected to complete in the final quarter.
The period covered by the statement also saw the disposal of a further four pubs, taking the total for the year to date to 24. Proceeds remain in line with book value.
Mike Tye, Spirit chief executive, said: “We are encouraged by this resilient performance despite extremely volatile trading conditions and uncertain consumer confidence. Both Managed and Leased pubs have delivered good growth in turnover after an exceptionally cold start to spring.
“We have the right balance of ingredients for success in the long-term, including our continued focus on delivering a great guest experience, building compelling Managed brands, and an ongoing emphasis on investment and innovation in the Leased estate.”
It has made no change to its end of year outlook.
