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Pubmaster helps boost Punch profits by 38%

11 November 2004
Pubmaster helps boost Punch profits by 38%

The acquisition of Pubmaster and organic growth in its existing estate helped Punch Taverns boost profits by 38% in the year to 21 August.

The group, which has nearly doubled in size over the past two years, now operates more than 8,300 leased and tenanted pubs.

It increased pre-tax profits from £113m to £156m on the back of a 49% rise in turnover to £638m.

A key driver behind these figures was the £1.2b acquisition of Pubmaster's estate of 3,115 community pubs in December. Punch also bought another 80 individual sites.

The original Punch estate increased like-for-like sales by 2.9%. Profit per pub rose by 3.9% and earnings before interest, tax, depreciation and amortization grew by an average 8.7% per site.

"These excellent results demonstrate a continuation of the trading momentum which characterized the first half," said chief executive Giles Thorley.

He said that market conditions remained "stable" and that current trading was "encouraging".

"We see good opportunities for further acquisitions and property-based transactions to further enhance shareholder value," he added.

In the past year, Punch has invested £46m in its estate, attracted more than 1,600 applicants to run its pubs, and put 1,800 people through its award-winning training programme.

It sold 256 Pubmaster sites that overlapped with existing pubs for net proceeds of £54m, which represented a £12m loss. The sale of another 120 sites for £22m was in line with book value.

In September, Punch added another 1,604 sites to its portfolio when it bought the Innspired Group for £335m.

It expects the integration of the Pubmaster and InnSpired pubs to generate annual cost savings of £10m and £3m respectively.

by Angela Frewin

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