New-look outlets give pubs chain a bit of extra Punch

Punch Taverns hailed the success of its new-look pubs yesterday as it revealed a bigger-than-expected jump in sales.

The firm surprised the City by revealing that like-for-like revenue at its chain of managed pubs rose 8.6 per cent in the 12 weeks to 5 March. This compared with 2.2 per cent growth in the previous quarter.

Punch, which did not reveal actual sales figures in its statement, also reported strong eating out demand, with food sales up 11.7 per cent on a like-for-like basis.

The company said it had refurbished 135 pubs in the last six months, focusing first on the Chef & Brewer and Fayre & Square brands, and lately accelerating the refit of the Flaming Grill chain.

"We remain on track to refurbish about 200 pubs in the full year," it said.

While the refit programme has delivered strong returns, Punch said it also saw sales growth of 5.2 per cent in those pubs not yet subject to investment.

Punch manages about 800 of its pubs directly, but also leases premises to independent landlords.

In its leased pub estate, net income was down 6.1 per cent, compared with the decline of 7.9 per cent in the first quarter.

Chief executive Ian Dyson, who joined the company in September from Marks & Spencer, is due to unveil a review of strategy on 22 March that could see the company call time on many of its pubs.

There is speculation that he may hand the tenanted estate to the group's bondholders in a radical move to tackle the company's 3 billion debt pile.

The plan would allow Punch to focus on the remaining 800 pubs it directly manages.

Numis Securities said there had been a material improvement in trading at Punch and said it would increase its full-year forecasts by 3 per cent.

Shares in Punch were up 4.5 per cent yesterday to 75.5p.