Pub group is a tale of two halves

WHICH PUNCH Taverns would you buy shares in if Ian Dyson goes through with his plan to split the firm in two? The managed division – which would be renamed Spirits – performed admirably in the twelve weeks to 5 March. Like-for-like sales were up 8.6 per cent, with food adding 11.7 per cent and drinks 7 per cent. The trading update for the second quarter was peppered with words like “investment”, “excellence” and “refurbishment”.

The leased division tells a more downbeat tale. Like-for-like net income was down by 6.1 per cent in the quarter and 7 per cent over 28 weeks, while the trading statement speaks of “disposals” and “decline”.

By way of excuse, the firm promises a “strategic review” tomorrow. It is clear that Dyson has one option: to unleash the managed pubs business, which is well-positioned to capitalise on growing food sales, while managing the decline of the tired leased division.