Show of Spirit as pub group cheered by strong sales rise

Spirit Pub Company said like-for-like sales from its managed estate rose 4.8 per cent in the eight weeks since the middle of August, with drinks sales matching the five per cent growth seen in food sales over the period.

In a separate statement, Punch Taverns, which demerged its better-performing Spirit division in August, said trading over the past eight weeks has been in line with expectations with strong food sales boosting profits.

Both pub chains have ambitious expansion plans for their Yorkshire pub estates. Spirit’s marketing director Clive Briscoe said the group will refurbish a number of its 130 Yorkshire pubs this year.

Its most recent investment was at the Generous Pioneer in Ilkley which re-opened as a Flaming Grill last week following a £300,000 refurbishment which created 30 new jobs.

“Our Yorkshire pubs have performed strongly in the first eight weeks and it’s not just because of the weather,” said Mr Briscoe. “Yes we had one good week, but also seven mediocre ones that were wet and windy.”

He warned that the consumer environment is going to be tough over the coming months.

“We’re going to have to work hard,” he said.

Punch Taverns’ senior business relationship manager Dave Rowland said the group has investment plans for a number of pubs around York.

“We’ve got really strong investments for the York area.

“The two really big ones are the Fulford Arms on the outskirts of York and the Rose & Crown on Lawrence Street. We’ll be spending £400,000 to £500,000 on each,” he said.

Punch has 43 pubs in Yorkshire.

In the year to August 20, Spirit said underlying profits rose 17 per cent to £48m, at the top end of expectations, after like-for-like sales at its managed pubs rose 5.2 per cent.

Chief executive Ian Dyson, who announced he will leave the business at the end of the year, said Spirit had made “great progress”.

Mr Dyson joined Punch Taverns in September last year before taking charge of its Spirit division following its demerger from Punch in the summer.

The former Marks & Spencer finance director will be replaced by deputy chief executive and former Whitbread executive Mike Tye.

“We have made a good start to the new financial year and, while we expect the consumer environment to be more challenging, we are well positioned to move forward,” said Mr Dyson.

Espirito Santo analyst Alistair Mcdonald said: “Ian Dyson will be leaving Spirit feeling very much like his job is done. The demerger is completed and Spirit has reported an impressive set of debut prelims.”

Mr Dyson declined to comment on speculation linking him with vacant chief executive jobs at Thomas Cook and Betfair, two companies where he is already a non-executive director.

“I am entirely focused on doing a good job at Spirit and handing over to Mike in December,” he said.

Punch, which is worth less than Spirit because of its debt, said full-year pre-tax profits fell a sixth to £76m, better than expectations of £73m.

Managed pubs have fared better than tenanted pubs in the face of touch economic conditions as they generally have more flexibility on pricing and promotional activity.

Punch built up its debt by making a series of highly leveraged acquisitions during the credit boom including the £2.7bn acquisition of Spirit in 2005.

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