Punch Taverns cashes in on fine spring weather

The group, which has 400 Scottish outlets - representing about 5 per cent of its overall estate - also said in a third-quarter trading update it was on track to spin off its Spirit leased pub division by the end of the summer.

Punch, whose branded chains include Chef & Brewer, said managed same-floorspace sales climbed 7.3 per cent in the 12 weeks to 28 May. Sales progress accelerated as the good spring weather took hold, with sales up a lower 4.9 per cent in the 28 weeks to 5 March. The Met Office has said it was the warmest Easter in 60 years.

Punch, whose pubs include the Malt Shovel in Edinburgh and Glasgow's Beechwood, said the good weather "has undoubtedly helped trading".

The group said that investment in the estate had also contributed to the better Q3 sales performance, with sales in uninvested pubs significantly lower at 3.5 per cent. Punch said 160 pubs had been refurbished in the 40 weeks to 28 May.

Managed pub food sales rose 8.4 per cent in the 12 weeks to 28 May, while drink sales were up 7.3 per cent. Like-for-like net income was off 3.3 per cent.

Ian Dyson, Punch's chief executive, who joined last year from Marks & Spencer, where he was finance director, said: "We are pleased that our operational initiatives continue to translate into improved performance.

"This has been achieved during a period of substantial change as we prepare for the proposed demerger of Spirit. Despite the challenging UK consumer environment we are on track to meet our full-year expectations."

Punch's shares, which have fallen by more than 12 per cent in the past two months, closed up almost 7 per cent at 74.95p. City analysts were positive on the update.

Douglas Jack, leisure analyst at Numis Securities, said: "If trading trends in Punch continue to improve, its value may prove to be far greater than many believe."

Nigel Parson, drinks specialist at Evolution Securities, said he believed Spirit may be vulnerable to a takeover bid once it had been demerged.

But he said that within Punch "there is sufficient asset value to give it a good chance to restructure and deleverage (cut borrowings]".

Leased pubs are run by publicans who pay the company rent and rely on it for their beer supplies. Managed pubs, which have done better in the 2008-9 recession and following a period of slow growth, are run directly by the company and tend to benefit from greater investment.

Punch, which employs 16,000 people, had previously recorded pre-tax losses of 350.7 million in the first six months of its financial year, compared with profits of 70.3m in the same period in the previous year.

The decline was mainly caused by a 366.8m impairment charge as the value of its non-core pubs was written down, reflecting the declining fortunes of the sector.

The City consensus forecast for Punch's full-year pre-tax profit is 124m, with the range running between 119.m and 129.5m. The group plans to demerge its 950-strong Spirit division to create two listed companies.