Spirit pub group profits up 11%
Pub group Spirit, currently the subject of a takeover offer from Greene King, has unveiled an 11% rise in pre-tax profit for the year.
In its preliminary results for the 53 weeks to 23 August 2014, the company saw pre-tax profit rise from £54 to £60m. Revenue was up 5.6% to £800.9m.
Chief executive Mike Tye (pictured) declared that it had been a "strong" year for Spirit, driven by "effective execution of our clear and consistent strategy".
He said: "Managed division continues to outperform the market with its strong portfolio of brands, while our Leased division is delivering market-leading performance and is in growth. We ended the year with a healthy balance sheet and strong earnings and dividend growth, underpinned by good cash generation.
"Looking to the future, the business is well positioned for further progressive growth, both organically from our existing portfolio and through acquisitions."
The business was helped by an extra week in the year, as well as milder weather at the start of the year, although it came up against tougher comparatives over the simmer months but still increased average weekly sales in its managed estate by a further 5% to £18,100.
Meanwhile, the leased estate saw like-for-like sales growth of 2.8% over the period and like-for-like net income increasing by 4.2%.
Spirit's capital expenditure for the year was £44m, of which £24m was invested in its managed estate, £6m in its leased estate, and £3m on the acquisition and investment in three freehold pubs as well as £3m on the purchase of freehold pubs already operated by Spirit.
Last week, Greene King upped its bid for Spirit, with a new offer valuing its intended acquisition at 109.5p per share. Its previous offer of 100p per share was rejected last month.
Spirit's board has said it will accept the new bid on the condition that other terms can be agreed, according to a statement made to the City.
Spirit has 1,227 managed and leased pubs across the country. It was formed in August 2011 following a demerger from Punch Taverns. Its 794 managed pubs operate under brands including Chef & Brewer, Taylor Walker, Fayre & Square and John Barras. Its leased estate has 433 pubs, with an average annual net income of over £100,000.
