Staffordshire-based pubs group Punch Taverns has forecast stronger-than-expected profits after its new-look managed estate saw a summer trading improvement.
Punch said like-for-like sales in the division grew 2.6 per cent in the fourth quarter to the end of August, an improvement which helped reduce the decline for the financial year as a whole to two per cent.
As well as favourable weather in June and July and the positive impact of the World Cup, Burton-based Punch said the estate benefited from increased investment and the roll-out of more food-led sites such as Fayre & Square and Chef & Brewer.
Formerly known as Spirit Group, the managed business refurbished around a quarter of its 800-strong pub estate during the financial year.
Fourth quarter sales improved in the leased and tenanted division, which features more than 6,300 pubs, although like-for-like profits will be down by around 10 per cent to 11 per cent in the year due to an ongoing squeeze on drinks margins.
Pub failures in the estate have halved and financial support to tenants has stabilised at just under £2 million a month, the company added.
Across the group, Punch said underlying earnings were now likely to be marginally ahead of previous expectations.
Panmure Gordon stockbrokers raised its full-year profits forecast to £131.5 million from £128.2 million as a result of the upgrade.
Punch said it was encouraged by the current trading momentum but added the near term trading outlook remained uncertain, particularly given the potential impact of the June budget on consumer spending next year. It has already warned the VAT hike to 20 per cent in January “will put further unnecessary pressure on the pub trade”.
It added: “Against this backdrop, we believe it is sensible to plan cautiously and we have prepared our financial plans accordingly.”
