Punch Pubs FY operating profits rise 43.6% to £48.4m

Punch Pubs has reported a 43.6% uplift in operating profits from £33.7m to £48.4m for the year ended 11 August, following a successful acquisition strategy.

During the year, the group acquired 36 pubs at a total cost of £25.2m, which was funded from available cash resources and drawing on the revolving credit facility.

It comes as total revenues at the pub group also rose 3.45% from £313.5m to £324.3m in the current period, as all three divisions – leased and tenanted, managed partnership, and Laine – delivered like-for-like sales growth.  

Underlying EBITDA for the pub estates before central costs rose by £11.2m to £117.3m. 

Meanwhile, EBITDA for the period hit £89.1m, of which £91.2m was classed as underlying EBITDA. According to the group, this figure compares “positively” to the £76m of adjusted underlying EBITDA from the wider Punch Group in the year to August 2019.  

The group has already identified its next batch of some 70 pubs to convert to the management partnership model, which will be phased progressively over a three-year period. 

Punch Pubs said it was pleased with the strong returns on investment from past conversions, and as a result, expects to achieve similar returns on future conversions of between 20% and 30%. 

The Punch Pubs Group currently comprises 1,258 pubs, 92% of which are owned on a freehold or long-leasehold basis.