Investment programme drives 7% profit rise at Spirit
The Spirit Pub Company has reported a 7% rise in half-year profits, boosted by the firm's ongoing investment programme.
The owner of pub chains including Chef & Brewer and Fayre & Square, which operates around 1,300 pubs following its demerger from Punch Taverns last year, said pre-tax profits were up to £20m from £18m a year earlier.
It has completed 76% of its investment programme: refurbishment of its Chef & Brewer and Taylor Walker brands has ben finished, with average return on investment in excess of 25%. The focus is now on its Flaming Grill, John Barras and Original Pub Company brands.
Like-for-like sales from its managed estate of 800 outlets were up 5.6% for the six months to 3 March 2012, but its leased business was down 4.5%. The company said this was in line with expectations as a result of rent rebasing and pressure on beer volumes.
Around a quarter of the leased estate will undergo a rent review in the financial year, and with many rents set at the peak of the market in 2006/07 Spirit said there was scope for significant downward revision.
Mike Tye, chief executive of Spirit, said: "Spirit continues to make good progress in transforming and revitalising the business. We have delivered further strong growth in managed sales and margins through continued investment in our brands, our estate and our people supported by strong cost control.
"The leased business has performed in line with our expectations and we have built a strong management team to drive performance improvement. Today we have also announced our first dividend payment as a listed company and, while we are mindful of the ongoing economic uncertainty and consumer pressures, we remain on track to deliver our full-year expectations."
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By Janie Manzoori-Stamford
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