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Punch predicts a pick up in trade in the summer

24 April 2008 by
Punch predicts a pick up in trade in the summer

Punch Taverns has hailed the changing face of the pub market and predicted a pick up in trade this summer.

The group, which carried out a refinancing exercise last year before the credit crunch and sold more than 800 "bottom end" pubs to Admiral, said it has seen a significant pick-up in the numbers of people applying to become a lessee.

The rise comes despite the pub trade's struggles with duty increases and slowing consumer spending.

Nigel Turpin, corporate affairs director at Punch, said: "We've seen far more people from increasingly varied backgrounds wanting to become retailers since the ban, as who really wants to work in a smoky environment?

"We're also seeing the consumers that didn't like the smoke coming back to our pubs."

On the predicted short-term fallout from the smoking ban, Turpin said: "Ultimately running a good pub is relatively straightforward. You need to provide a clean pub, good service, smiling staff and a decent menu.

"It's the street-corner pubs that aren't thinking about how they can evolve and are still mourning the loss of smoking in pubs that are losing out."

Punch, which has more than 7,500 leased pubs, said average licensee profitability had hit a record £40,000, up 11% year-on-year.

Pre-tax profit in the half year to 1 March was £109m (2007: £138m), which included an exceptional charge of £17m relating in part to a reduction in Spirit support staff following property sales and conversion of managed pubs to lease.

Turnover was £813.5m compared with £921.1m a year ago.

After recent sale speculation, Turpin reiterated that Spirit was not on the market.

Punch Taverns rules itself out of Mitchells & Butlers acquisition >>

Mitchells & Butlers has ‘less than 50%' chance of acquiring Spirit >>

Government must address dominance of Britain's largest pub companies >>

Pub company Shepherd Neame unconvinced of merits of minimum pricing >>

By Chris Druce

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