Punch reports strong first quarter trading after full year revenue grows to £338m, inflationary price rises helped drive strong profit growth: Punch Pubs & Co, the Andy Spencer-led pub company, has reported strong first quarter trading after the company’s full year revenue grew to £338m. In a trading update for the 52 weeks ended 10 August 2025, the company said quarter one trading to date (eight weeks to 5 October 2025) “has been strong, with Ebitda ahead of the same period in 2024”. It said it expects to further benefit from like for like estate growth, maturing profits in pub partnerships, opportunistic acquisitions and optimising its cost base. It comes as Punch reported total revenue was £337.9m for the year to 10 August 2025, compared to £323.5m in the prior year period of 52 weeks to 11 August 2024. Both segments (Leased and Tenanted and Pub Partnership) delivered like-for-like underlying Ebitda growth when compared to the prior year. Underlying Ebitda for the pub estates before central costs increased by £7.1m to £129.8m. Ebitda for the period was £95.8m (prior year 52 weeks: £88.6m), of which £98.4m was classed as underlying Ebitda (prior year 52 weeks: £91.1m). Underlying Ebitda for the 52 weeks to 10 August 2025 of £98.4m compares positively to the £76.0m of adjusted underlying Ebitda from the wider Punch group in the year to August 2019, being the most recent financial year prior to the covid pandemic. The company reported a pre-tax profit of £26.2m (loss of £22.8m after non-underlying items), compared to £26.1m in 2024 (£0.6m after non-underlying items). The non-underlying items included a £43.8m loss in movement of properties valuation (2023: loss of £21.9m). The company said: “This strong profit growth stems from growth in our like-for-like estate driven by inflationary price increases and trade enhancing capex investment; maturing profits from pubs converted from L&T to Pub Partnerships; opportunistic acquisitions of single sites and small pub portfolios with 35 acquisitions completed in the year; and optimising our cost base as we implement the £5.1m cost saving plan identified in partnership with Deloitte.” In the 52-week period, the group spent £20m on the acquisition of 35 pubs. It also spent £40m (prior year 52 weeks: £28.8m) on expansionary and maintenance capital. It converted a further 14 pubs from L&T to Pub Partnerships in the quarter, with 36 pubs now having been converted for the year. Net proceeds from the sale of properties in the period was £12.6m (prior year 52 weeks: £14.8m), at £1.8m above book value (prior year 52 weeks: £0.6m below net book value). The group generated a net cash inflow from operating activities for the period of £94.1m (prior year 52 weeks: £86.3m). As at the 10 August 2025 period end date, the group had £94m of available liquidity, represented by £9m of cash and cash equivalents and £85m undrawn against the revolving credit facility. During the period, the group successfully completed the refinancing of the existing £600m senior secured notes and £70m revolving credit facility. On 5 June 2025, £640m of new senior secured notes were issued at 7.875%, which expire on 30 December 2030. The existing revolving credit facility was also extended to £85m, with an expiry date of 30 June 2030. On receipt of the proceeds of the new notes, the revolving credit facility was repaid in full, while £365.4m of the existing notes were repaid on 5 June 2025, with the remaining £234.6m being repaid on 30 June 2025. 

Merlin under pressure after debt sell-off: Blackstone-backed Merlin Entertainments is under increasing financial strain ahead of a critical refinancing, as the Legoland owner’s weak performance has led to a sell-off in its bonds and heightened fears over a potential restructuring. The Financial Times reports that Moody’s this week downgraded Merlin, which also owns Madame Tussauds and the London Eye, further into junk territory. The rating agency noted that “maintaining a sustainable capital structure will be challenging without further asset disposals or shareholder support,” as it cut Merlin’s rating to Caa1, seven notches below investment grade. Merlin has struggled with rising operating costs and subdued consumer spending since it was taken private in a £6bn leveraged buyout in 2019 – a deal that left the group saddled with more than £4bn of debt. As of the end of 2024, Merlin operated 135 attractions in 22 countries. Bonds issued by the leisure group have sold off in recent months, ahead of a refinancing of £630m of debt maturing in 2027. Merlin’s safest senior secured bonds, which were trading at par in March, now trade at 86 cents on the dollar. One high-yield bond trader said Merlin had been hit by a “perfect storm,” including a “harsh business environment, plus there’s high new capex needed, and an upcoming finance need – it needs a restructuring, big time”, he added. The year after Merlin was taken private, by a consortium of Blackstone, Canadian pension fund CPPIB and Kirkbi, the investment vehicle of Lego’s founding family, it was forced to close all but nine of its 130 sites when the covid-19 pandemic struck. Merlin subsequently turned to bond markets to raise €500m of emergency funding. Moody’s downgrade this week comes two months after a downgrade from another rating agency, S&P, which warned that Merlin could run low on cash next year as a result of depressed earnings and interest expenses. Merlin’s pre-tax losses more than doubled to £492m in 2024 after it wrote down the value of some of its largest assets by £384mn, including a £163mn impairment of Madame Tussauds. Alongside struggles at Merlin’s long-held assets, the company has said returns generated by Legoland New York and Legoland Korea, which opened in 2021 and 2022 respectively, have failed to meet expectations. Helen Rodriguez, head of special situations at CreditSights, said that Merlin’s profitability was being “gnawed away” by “under-investment, tired and less relevant assets, a downturn in US visitor numbers across the sector and a weak UK consumer”. Merlin’s “scattergun overexpansion” has forced it to look at dialling back its sprawling portfolio, Rodriguez added. Multiple restructuring advisers said Merlin was on their watchlist, while several credit investors questioned the sustainability of its capital structure. Merlin said it was improving profitability and its “smart spending” programme would generate roughly £50mn of annual cost savings. “Merlin continues to maintain a healthy operating cash flow with ample liquidity and continues to invest in capex in support of the long-term growth of the business,” the company said. The company is due to receive around £200m from the sale of 29 Lego Discovery Centres to the Lego Group by early 2026. It shelved the sale of its British aquariums this summer after bids fell short of expectations. A spokesperson for Blackstone and Kirkbi said: “We have confidence in Merlin and its management team and believe the financial profile of the business will continue to strengthen.”

PureGym to open 700th site globally today: PureGym, Britain’s biggest health and fitness club operator, will today (Friday, 24 October) open its 700th gym globally. Located at South Baileygate Retail Park in Pontefract, West Yorkshire, the opening not only marks a significant milestone in PureGym’s growth journey, but also a full circle moment for the business, as it is located just 16 miles from the first ever PureGym club. Headquartered in Leeds, PureGym opened its first gym on Cloth Hall Street in Leeds city centre in November 2009 and “pioneered the model for 24/7 low-cost, no-contract gym memberships in the UK”. The company said that demand for “affordable, flexible gym memberships” has grown significantly over the last 16 years “as consumer spending habits have evolved and increasing importance has been placed on physical and mental health”. It said: “PureGym has responded by opening hundreds of gyms across six markets globally, making affordable fitness a reality for millions of people.” Clive Chesser, group chief executive officer at PureGym added: “We’re incredibly proud to open our 700th gym globally, and to be returning to our roots in West Yorkshire with the opening of PureGym Pontefract. As a business and as an industry we’ve come a long way in the last 16 years, capitalising on the growing importance being placed on health and wellbeing and the subsequent increase in demand for high-quality gyms, with low-cost flexible memberships. From Dewsbury to Dubai and from Bradford to Brooklyn, our mission has always been to inspire healthier nations. The opening of PureGym number 700 represents the strength of our operating model, the dedication of our teams, the trust our members place in us and another exciting landmark in our growth story. Our 700 gyms are spread across six countries, enabling us to facilitate millions of workouts every single week. As we continue our expansion across the UK and internationally, we’ll continue to invest in communities like Pontefract; creating more jobs, supporting the health of millions more people, and helping them to leave the gym feeling their best.” The new gym marks PureGym’s 40th opening in the UK so far this year and the business has plans for “many more”. Members will have 24/7 access to a huge range of state-of-the-art equipment, weights and cardio equipment, a fitness studio and a range of classes, as well as access to certified personal trainers.