Burton shows that pubs can make money

A sharp rise in sales was reported by pub giant Burton as it also revealed it plans for later this year of demerger were making progress. Centrum 100-based Punch Taverns revealed that like for like sales in Spirit, the managed side, increase 7% in the twelve weeks to May 28 in their third-quarter trading update.

They sited the refurbishment programme and hot weather as helping to increase sales. Spirit food sales increased 8.5% and drinks were up 7.5% with average net income per pub in their leased pubs increasing by 1.3%.

The demerger was expected to be completed by summers end and they were on target to meet their full year profits. They were pleased that new operational initiatives helped to translate into better performance for both Punch and Spirit. Despite the difficult consumer market of today the business is on track to reach their expectations with market estimates at around £122m.

Because of huge debt burden Punch decided to split into two with the stronger business, Spirit, holding 900 operated pubs and Punch would maintain 5,000 that were leased and tenanted and financially weaker and owing over £2 billion. Over the next 3 to 5 years Punch plans to reduce the tenanted pubs to just 3,000 through sell-offs plus cutting debt in the process.

At the weaker division, which will maintain the Punch name, earnings fell almost 6% in the 40 week frame. The firm also announced how they would create 80 additional jobs at their Centrum 100 headquarters in the build up to the eventual merger at a cost of a very minimal number of jobs at its pubs around the country.