Punch Taverns points to improving trends despite net income fall

Pub giant Punch Tavens has pointed to improving trends in the performance of its estate, despite a 3.5% fall in like-for-like net income for the second quarter of the year.

In its interim results for the 28 weeks to 2 March 2013, published today, Punch unveiled a pre-tax profit of £26m and revealed that it had sold 164 pubs and other assets for a total of £55m.

And while its like-for-like net income was down by 3.5%, it highlighted the fact that this was an improvement on the 5.3% drop in the first quarter, despite the ongoing poor weather.

Stephen Billingham, executive chairman of the company said: "Our profit performance for the first half of the year has been in line with management expectations, with improving trends in the underlying business."

Meanwhile he said that discussions about a restructuring of the company were ongoing and that it was still on track to launch in the first half of 2013.

Punch had a total of 4,357 pubs as at 2 March this year, 2,912 of which were in its core division, the more profitable collection of higher quality pubs that the company plans to keep, and 1,445 of which were in its non-core division.

The non-core pubs have an average net income per pub of around £36,000, compared to £73,000 in the core estate. The plan is to sell off the non-core pubs within five years.

Punch said it would invest in around two thirds of the core estate over the next five years, targeting ££40m per year across 400 schemes per year. It also has plans to continue driving up food revenue so that it reaches 35% of partner revenue within five years. Food sales are currently estimated to make up 25% of partner revenue, up 2.4% from March 2012.