Punch Taverns has spent an average of £102,000 transforming 476 of its pubs during the past year, including investments in foodservice facilities, it was revealed this week.
Investments are partly structured to drive increased food sales, which represent a significant opportunity to its leased partners.
Its five-year target is to increase the food sales mix from an estimated 22% in 2011 to 35% of partner revenue.
Food sales now make up an estimated 27% of partner revenue, up another three percentage points from August 2012. 87% of its partners now operate a “meaningful” food offer, up from 77% two years ago, the company said.
Punch’s top-performing pubs are now generating average net income of £74,000 per pub versus around £30,000 for non-core establishments, which are typically wet-lead and do not have a food offering.
The Punch estate presently comprises 4,096 pubs located across the UK. Its “core estate” represents a higher quality, geographically well-located portfolio of 2,990 pubs, which it says is suitably positioned to adapt to changing market conditions and support sustainable long-term growth.
The company has a plan to invest in around two-thirds of the core estate over the next five years, targeting £40 million per annum across 400 schemes per year.
Punch also revealed that its Punch Buying Club, launched to make it easy for partners to access products and services, including kitchen and catering equipment, is now being used by 90% of its core pubs.
Earlier this year it also set up a New Business Development team to support new partners with the initial investment, the launch of their pub and throughout their first six months of trading.
Preliminary results for the year to 17 August 2013 show that Punch generated EBITDA of £216m on revenues of £458m.
Stephen Billingham, executive chairman of Punch Taverns, said: “We have made excellent progress in implementing operational changes during the course of the year and this is reflected in our recent financial performance. Pubs in which we have invested have shown significant improvement in performance and the core division accounts for over 80% of Group EBITDA.”