Punch Pubs

Punch Taverns plc

File:Punchlogo.gif
Company type	Public (LSE: PUB)
Industry	Pubs
Founded	1997
Headquarters	Burton upon Trent, England, UK
Key people	Peter Cawdron, Chairman Giles Thorley, CEO
Revenue	£1,704.9 million (2007)
Operating income	£586.8 million (2007)
Net income	£278.4 million (2007)
Parent	Heineken N.V.
Website	www.punchtaverns.com

Punch Taverns plc (LSE: PUB) is the largest pub and bar operator in the United Kingdom, with around 9,500 tenanted and managed pubs. It is headquartered in the traditional brewing centre of Burton upon Trent in Staffordshire. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

History

The company was founded in 1997 when it bought the Bass Lease portfolio of public houses.

It floated on the London Stock Exchange in May 2002 and is currently a constituent of the FTSE 250 Index. It bought Pubmaster in November 2003, followed by InnSpired in 2004. The acquisition of larger rival Pubmaster, catapulted the operator to number two in the league. The acquisition took the group to more than 7,400 pubs and cemented Punch's position as a major pub operator. After adding the 2,859 pubs to its estate, it later gobbled up the InnSpired Group and Avebury.

In December 2005, it agreed to take over The Spirit Group for £2.679bn which had previously been owned by the private equity firms Blackstone, Texas Pacific and CVC Capital Partners.

This acquisition turned it into the largest pub operator in the country, overtaking solely tenated operator Enterprise Inns.

The deal reunited the managed and tenanted pubs of the original Punch Taverns, which was forged by the entrepreneur Hugh Osmond from the former Allied Domecq and Bass pub estates.

Mr Osmond snatched Allied Domecq's pubs from Whitbread in 1999 after a ferocious bid battle with the then brewer. After the deal, Punch Taverns spun off its managed pubs into a separate division, Punch Retail, which was later renamed Spirit Group.

Meanwhile, Spirit expanded when it acquired Scottish & Newcastle's 1,450-strong pub estate in 2003, beating off rival Mitchells & Butlers.

In March 2008 Punch withdrew from a bid to merge with Mitchells & Butlers, owners of the All Bar One pub chain.

Operations

The new 24/7 drinking laws and a smoking ban in all enclosed public places from 2007 are a factor of Punch's highly acquisitive strategy.

Chronic overcapacity on the high street is another problem. This stems from an effort in the 1990s to regenerate town centres when local authorities allowed pub companies to move into cinemas and churches that had fallen into disuse. That led to new discount operators moving in. That's why the likes of Punch have focused on the "local boozer", running pubs in suburban and rural communities.

In a competitive market, size is important. Beer is still by far the biggest product sold in pubs, despite a 16 per cent decline in beer sales since 1979 and an explosion in food sales, which now accounts for 40 per cent of average pub revenues.

Old Orleans

In the summer of 2006 Regent Inns bought the Old Orleans bar chain from Punch Taverns. The deal for £26 million covered 31 units that Punch acquired, when it bought out the Spirit Group in January 2006. As well as the Old Orleans brand, Punch Taverns sold 290 Spirit sites to the private equity firm GI Partners.

Spirit Group

Spirit Group is the managed arm of Punch Taverns operating several pub chains. The group owns over 700 outlets nationwide.

Originally formed as a result of demerger from Punch Taverns in April 2002 it acquired 800 outlets from Punch then also acquired 1,200 outlets from the sale of Scottish and Newcastle's managed house estate. The group came back under the control of Punch in 2005.

Pub chains owned by the Spirit Group include Two for One, Chef & Brewer, John Barras and the Eerie Pub Company which has a gothic horror theme.

Premier Lodge

Spirit Group formerly owned the Premier Lodge chain of budget hotels. These were acquired by Whitbread in 2004 and rebranded as Premier Travel Inn hotels (now renamed as 'Premier Inn') However many Spirit Group run pubs remain integral parts of Premier Inn properties.

References

External links

• Punch Taverns
• www.thespiritgroup.com - official website