Punch struggles as Spirit rises

Pub group Punch Taverns said like-for-like net income from its core estate for the first 16 weeks of the new financial year fell 1.5 per cent, while sales at its demerged unit Spirit Pub Co for the same period rose 6.2 per cent.

Punch's average net income per pub across the full estate, however, rose 1.3 percent over the quarter, benefiting from the ongoing disposal of non-core assets.

Punch Taverns had demerged its better-performing division Spirit in August as part of a move to cut billions of pounds of debt.

The company, which operates nearly 5,000 tenanted pubs, said it remained on track to sell 400-500 non-core pubs for the year having struggled throughout the economic downturn. Tenanted pubs are run by publicans who pay the company rent and rely on it for their beer supplies.

Separately, Spirit said it was encouraged by the strong growth in both its food and drink sales and was on track to meet its full year expectations.

Food Sales rose 7.9 per cent for the 16 weeks to 10 December, while drink sales rose 6.1 per cent.

Spirit, which operates around 800 managed pubs, including the Chef & Brewer chain, are run directly by the company and generally have greater freedom on pricing.

Punch Taverns' shares have fallen more than 25 per cent since it announced the spin-off,.

Spirit Pub's shares have also lost more than a quarter of their value since the company started trading separately.