Posted on April - 22 - 2010
Punch Taverns’ £4m pot to improve region’s pubs
Punch Taverns is spending £4m to upgrade its leased pubs in the north west ahead of the World Cup to help landlords attract more customers.
The UK’s biggest pubs group is ploughing £1m of the money into Greater Manchester at 28 venues including The Horse & Jockey, Wilmslow, the Carters Arms in Denton, The Mountain Dew in Atherton and The Manchester Road Inn, Astley, near Leigh.
Chris Moulson, Punch’s operations manager for Manchester, said the investment would see improvements to signage, internal and external fixtures and fittings.
The refurbished pubs will also benefit from new food and cask ale offers and wifi access for customers.
The programme began early this year and will be completed in time for the soccer tournament, which begins in June.
Landlords across the region have also been given training on how to maximise business opportunities during the World Cup.
Mr Moulson said: “We are focused on helping our partners to grow their business. We are already showing good returns on our investments where these have been completed.”
Punch unveiled a 20 per cent slump in half-year profits and said it had stepped up efforts to help struggling landlords with £2m a month in support through measures including rent concessions and product discounts.
Punch Taverns, which has more than 7,100 pubs across the UK, posted underlying pre-tax profits of £66m in the six months to March 6 – down from £82m a year earlier.
It said financial aid for beleaguered pub landlords had been upped by £400,000 a month from an average of £1.6m a month last year, which impacted earnings.
The entire sector has been affected by a slump in consumer spending and increases in alcohol duty, with the government’s recent £3.5m offered in support to community pubs paling in comparison to cash pumped in by the industry, according to Punch.
But the group said it had received an Easter boost since the end of the first half, with trading over the long holiday weekend “good and slightly ahead of last year” in the managed estate.
The group added: “While we remain on track to meet our expectations for the full financial year we are mindful that market conditions remain challenging and are likely to continue to be so for the near-term.”
Punch has the added headache of a search for a new chief executive after recently shocking the market with news its boss is to stand down after nine years with the group.
Giles Thorley – seen as one of the pioneers of large modern British pub groups – announced his departure plans late last month, although the firm said today it was close to finding a successor.
The half-year figures showed the rate of like-for-like earnings decline in the leased pub estate stabilised at 11 per cent.
It has offloaded another 524 non-core leased pubs since the start of the financial year as it seeks to cut the group’s debt pile.
The managed estate saw broadly flat like-for-like earnings over the half-year, as the poor weather at the start of the year led to a 3.4 per cent drop in comparable sales.
This offset a 0.3 per cent improvement in profit margins. Analysts at Panmure Gordon noted encouraging signs in the leased and managed estates and said “significant shareholder value” could be created if the group halts the like-for-like sales decline in managed pubs and starts to rebuild profitability.
They added the appointment of a new chief executive should also act as a “positive catalyst” for the shares.
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