Punch: Spirit demerger set for 1 August

Punch Taverns, which had in March this year announced its intention to separate its group into two businesses through this demerger, today confirmed the details of the move in a meeting with analysts and investors.

As of 1 August 2011, Punch and Spirit will be two separate listed companies. The company aims to make Punch one of the UK’s “highest quality and most trusted leased operators”. Spirit, which currently includes both managed and leased pubs, will ultimately be a solely managed pub business.

“We are pleased to announce the formal intention to demerge Spirit,” said Ian Dyson, Punch CEO. “This will create the foundation for both Spirit and Punch to execute their plans to deliver long term sustainable value for all of our stakeholders and builds on the significant progress that both businesses have made over the last year.”

The group said it will invest £92m in Punch and £113m in Spirit, to set both businesses on the path for growth and help them deliver their strategic objectives.

Spirit​

Punch Taverns said it has positioned Spirit “to exploit the growing eating-out market, with a view to becoming one of the UK’s best managed pub businesses”.

The division currently comprises 803 managed pubs and 549 leased pubs. Over the next few years, the company plans to convert up to 100 leased pubs into managed pubs, while some venues will also be refurbished.

It is believed that over time, those sites not considered suitable for conversion to managed pubs will be sold, and Spirit will become an exclusively managed pub business.

Walker Boyd will be chairman of Spirit with Ian Dyson as chief executive, Mike Tye as deputy chief executive and Russell Margerrison as interim finance director.

Punch ​

Long-term plans for Punch will be to downsize the estate to around 3,000 “high-quality” pubs in order to build its image as a quality and trusted leased operator.

Punch currently comprises 5,080 pubs, of which 2,954 are in the core division and 2,126 are in the non-core division. The company plans to sell pubs over a five-year period, at a rate of around 500 every year to reach its set target.

Stephen Billingham will become chairman of Punch in September, with Roger Whiteside as chief executive and Steve Dando as finance director.

The demerger is conditional on receiving the approval of Punch shareholders at a general meeting due to be held on 26 July.