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Taverns' trading up.

THE UK's biggest pubs group forecast stronger-than-expected profits yesterday after its new-look managed estate saw a summer trading improvement.

Punch Taverns said like-for-like sales in the division grew 2.6% in the fourth quarter to the end of August, an improvement which helped reduce the decline for the financial year as a whole to 2%.

As well as favourable weather in June and July and the positive impact of the World Cup, Punch said the estate benefited from increased investment and the roll-out of more food-led sites such as Fayre & Square and Chef & Brewer.

Formerly known as Spirit Group, the managed business refurbished around a quarter of its 800-strong pub estate during the financial year.

Fourth quarter sales improved in the leased and tenanted division, which features more than 6,300 pubs, although like-for-like profits will be down by around 10% to 11% in the year due to an ongoing squeeze on drinks margins.

Pub failures in the estate have halved and financial support to tenants has stabilised at just under pounds 2m a month, the company added.

Across the group, Punch said underlying earnings are now likely to be marginally ahead of previous expectations.
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Date:Aug 25, 2010
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