is working b tenants
Edinburgh’s Cafe Royal Bar is part of Punch’s soon to be demerged Spirit division.
Punch demerger plans on track
Neil Robertson: critics will say pubcos have to do more to improve conditions for leaseholders.
“We’ve got a 100% record so far, including in some intractable situations. “I think there’s a willingness on both sides to resolve these things – in the long-term it just damages everybody. “There’s often a lot of pride at stake.” More generally, he’s convinced there’s a genuine desire from the leasing companies to get to the bottom of any issues tenants face and to make the relationship work for both parties. “It wasn’t that there wasn’t a will before,” he said, “there was just a lot of inconsistency and variation. “Now the HQ gets involved, so if a BDM [pubco business development manager] takes a hardline on a particular issue, there is some comeback. “It’s not that bad people suddenly become good, but we now have a system that’s more focused on the tenant. “There will be some who will say it needs to go further, and that will all be aired by the Business Innovation and Skills Committee in June.
“Critics will say the code only covers
so much, what about the things it doesn’t cover? That’s, if you like, a separate discussion.”
One issue the committee seems set
to return to is the controversial subject of the tie. The BISC report recommended that pubcos should offer leaseholders a free of tie option, but even if it’s something the government backs Robertson said there’s no guarantee it will make life any better for tenants.
Many tenants, he said, benefit hugely
from the relationship and support provided by their BDM, but that back- up may well disappear if the tie goes and the pubco can no longer afford to pay for such services. There also remains the outside possibility that the pubcos could be referred to the Competition Commission.
For all the questions which appear to have been answered on the way pubcos interact with their tenants over the past couple of years, it seems we’re still waiting on responses to a few more.
THE boss of Punch Taverns confirmed last week that the firm is on track to complete its demerger into separate leased and managed businesses by the end of the summer. The move is the result of a strategic review begun by Ian Dyson on becoming Punch chief executive last September. It will see the firm’s Spirit managed division demerge from Punch to create two independent public companies, assuming certain legal, tax and regulatory matters are settled. Punch said the demerger was the best option to give each business focus and deliver maximise value to shareholders. Dyson, a former Marks & Spencer finance director, will lead the new Spirit business, with Roger Whiteside, the current managing director of leased pubs, becoming chief executive of Punch. According to plans announced last month, Spirit will take on the current managed estate of 800 pubs as well as a further 150 taken over from the leasing side.
The leased division is in the
process of being downsized, with some 3000 pubs up for sale. The aim is for the demerged Punch to be anchored on a core estate of 3000 “high quality” leasehold outlets.
Dyson said Punch’s recent interim results, for the 28 weeks to March 5, revealed a “strong trading momentum” which has provided a “solid platform for the proposed demerger of Spirit, on which we are making
good progress”. The figures revealed that the firm made a loss after exceptional items of £325 million, which included an impairment charge of £367m relating to the write-down in value of 2400 pubs it aims to sell over the next five years. Profit before tax fell by 8% to £61m, from £66m over the same period last year. The firm said its improved underlying financial performance indicated an upturn in fortunes for its leased division, which saw average net income per pub rise (by 0.3%) for the first time in three years. Leased like-for- like net income was down 7%, but Punch said the position was “improving quarter by quarter”. And it reported “strong
growth” on the managed side, with like-for-like sales up 4.9% in the 28-week period and managed operating profit up 12%. “We are pleased that our operational initiatives continue to translate into improved performance within both the managed and leased businesses,” Dyson said. “Despite the challenging UK consumer environment, we remain confident of making further progress in the second half of the financial year. “We have had a good start to the third quarter and are on track to meet our full-year expectations. “This strong trading momentum provides a solid platform for the proposed demerger of Spirit, on which we are making good progress.”
April 28, 2011 - SLTN - 17
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58