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Thu 24th Sep 2015 - Punch Taverns boss – some of our formats could be national brands
Punch Taverns boss – some of our formats could be national brands: Punch Taverns chief executive Duncan Garrood has vowed to keep its pubs “at the heart of the community” – but believes some of its concepts have the potential to become national brands. Garrood, who joined the company in June after serving as president of the food division of MH Alshaya, a franchise operator of 55 brands headquartered in Kuwait, stressed the importance of continuing to invest in both Punch’s employees and its licensees and make sure its 3,400-strong estate “offered great hospitality”. And he said he sees “great potential” in both its Champs sports bars format and the shortly to be launched Brewed and Baked coffee-led concept, with the potential of growing them into national brands. Garrood also said he also had a team “working behind the scenes on other possible concepts”, although there was “nothing imminent at the moment”. Speaking at a Punch roadshow event held in Romford today, Garrood told Propel: “The heartland of Punch will always be the local community pub. There are opportunities to grow some of our other formats but we are not going to go away from what is the heart of our business. I look slightly jealously at the casual dining sector. People want to spend time eating and drinking with their family. We are in a hospitality industry that is thriving and focused on understanding its customer and delivering good value for money. I strongly believe a successful pub has to have the appropriate food offering. I want us to make sure we offer great hospitality and ensure that through training and support for our partners. We will continue to invest in our pubs. I have seen some fantastic pubs in the time I’ve been with the company and I’ve also seen some that could benefit from investment. We will also continue to grow our support for our partners. One of the pleasing things is that Punch put a scheme in place a couple of years ago to help new publicans through the start-up process. And a change in the way we select our partners means we probably only offer four in every hundred people the opportunity to run one of our pubs. Once we select these people we work with them on an extensive basis for the first half-year to make sure it’s successful. It costs us £50,000 every time a publican fails so we want to spend time investing in our people.” Punch will launch its Brewed and Baked licensed coffee shop concept in East Lothian, Scotland, next month and Garrood said, if it was successful, it would look to do more. He also believed its Champs sports bar format, which currently has six sites, also had “great potential” to grow and could become a national brand. He added: “I joined this industry firstly because of the importance of pubs in this country. They are so unique in our culture. I have found at Punch the most capable and dedicated people I have probably worked with – that’s despite everything they’ve been through with the restructuring of this company. They continue to want to help us improve and it has surpassed all my expectations. We have a great opportunity. People want to be made to feel special and we want to help our partners do that for the customers of our pubs.” In August, Punch Taverns sold 158 predominantly non-core pubs to NewRiver Retail, the real estate investment trust focused on the retail sector, for £53.5m. The deal was in line with Punch’s strategy to sell its non-core estate at a rate of circa 200 pubs a year – disposal pubs were sold at an average of £340,000 per pub and proceeds will be used to reduce net debt. Within the disposal portfolio are 150 pubs from the non-core estate and eight pubs from the company’s core estate that no longer meet the company’s criteria. Post-transaction, Punch’s core estate comprised of circa 2,900 pubs and the non-core estate had circa 500 pubs. The pubs being disposed of generated earnings before interest and tax of £7.3m over the last 12 months and have a current book value of £52.5m. Garrood said at the time: “This transaction is in line with our overall strategy of disposing of pubs within the non-core estate, reducing the overall level of our debt, whilst focusing on our high quality core pub estate.”


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