Pub company Punch Taverns has reported a profit before tax of £60m with average profit per pub up 4%, as it reaps the benefits of the disposal of non-core pubs.
However, announcing its preliminary results for the 52 weeks to 22 August 2016, Punch said that letting activity had been impacted by the introduction of the new Pubs Code.
EBITDA was £178 million (August 2015: £196 million), reflecting the impact of £324 million of strategic disposals completed over the last 24 months.
The company also reported that its retail division was operating ahead of expectations. The new Retail contracts, announced in November 2015, sees Punch take on pub and sales costs, excluding staff, paying the licensee a percentage of retail sales.
It says 242 pubs have been identified to operate under the Retail contract, of which 109 pubs are current trading at November 2016. Punch estimates that pubs operating under the new model will experience a profit uplift of between £15,000 and £25,000.
'The business has ended the year with a solid set of results, in line with our expectations, and which reflects the completion of our strategic disposal programme,' said Duncan Garrood, chief executive of Punch Taverns.
'We have made good progress towards delivering on the strategy we set out in November 2015. In particular the roll-out of our Retail division is progressing well and we are accelerating the roll-out to c.150 pubs per year.'
Garrod continued, 'The new Pubs Code Regulations has resulted in us having to re-market all lets in line with the new regulatory requirements. While this is impacting letting activity in the short-term, our expectations for the longer-term growth prospects for the business remain unchanged.'