Punch raises expectations as conditions improve
24 August 2010 09:32
Punch Taverns has said that annual results have benefitted from improved operating standards, increased pub refurbishment activity and favourable summer weather. The company added that this now meant that earnings before tax and exceptional items for the full year are expected to be marginally ahead of previous expectations.
In the 52 weeks ended 21st August, Punch said that its tenanted and leased division had seen success, with the percentage of pubs on substantive agreements being increased to 86%, failure rates being halved and financial support to its partners being stabilised at just under £2 million per month. However, profits remain under pressure as a result of lower drinks margin coupled with reduced rental income from returned pubs. Consequently, the company said that although improved sales volumes had been delivered over the final quarter, like-for-like profit decline is expected to be broadly in line with the rate reported for the half year.
In Punch Pub Company, the group's managed division, like-for-like sales in the 52 week period were 2% below last year. Improved trading was delivered in the second half of the year and particularly in the final quarter where like-for-like sales for the last 12 weeks were up 2.6%. Operating margins continued to improve since the half year and are expected to be broadly in line with last year.
In a statement, Punch said: "We expect the trading outlook in the near term to continue to be uncertain, particularly given the potential impact of the June budget on consumer spending into next year. Against this backdrop, we believe it is sensible to plan cautiously and we have prepared our financial plans accordingly.
"However, we are encouraged by our current trading momentum and are confident that the business change programmes and continued management actions in both sides of our estate have strengthened the business and positioned it to deliver solid longer-term operational performance."
Retail news is updated every weekday and is provided courtesy of: 
