Punch says demerger on track

WARM weather has helped struggling pub chain Punch Taverns post a rise in sales in the three months to 28 May.

The struggling landlord unveiled a 7.3 per cent increase in like-for-like sales in its Spirit managed pub division.

It said like-for-like food sales were up 8.4 per cent, while drink sales were up 7.3 per cent on a like-for-like basis.

Comparable net income for the 552 leased pubs in the Spirit unit was down 0.7 per cent.

The company said the recent hot weather and the refurbishment of 160 of its pubs had helped to boost its sales performance.

Punch said in March it would demerge Spirit from its leased pub operations as part of a strategy to reduce its crippling £3bn debt mountain.

Leased pubs, run by publicans who pay the company rent and rely on it for beer supplies, are generally less profitable for the company.

The Punch leased division of the business saw like-for-like net income drop by 3.3 per cent over the period.

Punch said it was in the process of converting some of these pubs to its managed brands and said it was making “good progress” on its demerger.

It added that it expected the process to be complete by the end of the summer.

Meanwhile, the firm said the finance director of its Spirit division, Roddy Murray, had decided to leave the firm just two weeks after he started the job. Punch said his departure was a personal decision.

Chief executive Ian Dyson said: “We are pleased that our operational initiatives continue to translate into improved performance for both Spirit and Punch. This has been achieved during a period of substantial change as we prepare for the proposed demerger of Spirit. Despite the challenging UK consumer environment we are on track to meet our full year expectations.”