Punch Taverns reports completion of strategic disposal plan, average profit per pub up 4%: Punch Taverns has reported performance in line with management expectations in the 52 weeks to 20 August reflecting the completion of its strategic disposal programme. Average profit per pub across the entire estate was up 4%, benefiting from the disposal of non-core pubs. There was core estate like-for-like net income growth of 1%. Underlying Ebitda was £178 million (August 2015: £196 million), reflecting the impact of £324 million of strategic disposals completed over the last 24 months. Underlying profit before tax was £53 million (August 2015: £61 million). It reported its Retail division is operating ahead of expectations. A total of 242 pubs have been identified to operate under the Retail contract, of which 109 pubs are trading at November 2016 (November 2015: 32 pubs trading) Retail contract roll-out plans have been accelerated to circa 150 pubs per year (up from previous guidance of 100-120 pubs per year). Under the Retail contract, anticipated pub Ebitda is between £100,000 and £110,000, representing an expected profit uplift of between £15,000 and £25,000 as compared to historical Ebitda under the tenanted and leased model. Its Mercury pub division, its smaller drink led pub estate, is on target to deliver like-for-like growth from the end of 2017. There has been positive progress in realising additional value from the non-trading parts of its extensive freehold property and land estate, having identified the potential for upwards of £100 million of additional value (not currently recognised in the external property valuation), of which £11 million was realised in the year. Nominal net debt was reduced by £223 million in the year (16% reduction). Nominal net debt to underlying Ebitda has been reduced to 6.6 times (August 2015: 7.2 times). Its property estate externally valued by GVA at £2,030 million; £848 million in excess of nominal net debt (August 2015: valuation and Matthew Clark investment £790 million in excess of nominal net debt). Nominal net debt to property valuation has been reduced to 58% (August 2015: 67%). Punch’s strategic disposal programme is now complete, having delivered ahead of expectations with net proceeds of £234 million in the year, £75 million above book value. Chief executive Duncan Garrood said: “The business has ended the year with a solid set of results, in line with our expectations, and which reflects the completion of our strategic disposal programme. We have made good progress towards delivering on the strategy we set out in November 2015. In particular the roll-out of our Retail division is progressing well and we are accelerating the roll-out to c.150 pubs per year. The new Pubs Code Regulations has resulted in us having to re-market all lets in line with the new regulatory requirements. While this is impacting letting activity in the short-term, our expectations for the longer-term growth prospects for the business remain unchanged. Punch has a clear plan for the future, a strategy that is progressing well, and a unique operating model that is expected to drive improved performance over the coming years.”

Elegant Hotels signs Antigua hotel management contract: Elegant Hotels Group, the owner and operator of six upscale freehold hotels and a beachfront restaurant on the island of Barbados in which sector investor Luke Johnson has taken a 10.64% stake, has signed a management contract with Hodges Bay Resort in Antigua. The company had previously announced on 14 October that it had reached an agreement in principle on the contract with the hotel’s owner, JSN Development Group. The contract has now been signed following the completion of the formal legal agreement. Hodges Bay Resort is currently under construction and is expected to open its doors in mid to late 2017, when it will be branded as “Hodges Bay Resort & Spa by Elegant Hotels”. It will be a 122-room luxury beachfront resort, spa and residential development in a prime location on the popular north shore of Antigua. It is ideally located for many of the island’s main attractions, and is within easy reach of both VC Bird International Airport and the island’s capital, St John’s. The accommodation choices will include ocean-front apartments and villas, as well as executive suites and penthouses. The property will be a breakfast-inclusive hotel with various high-end dining choices and a self-catering option for the villa occupants. Other features of the property include a heated ocean-side infinity pool, a heated lounge pool, a luxury five-therapy room spa with advanced technology hydro pool, three dining outlets, a coffee shop, an al-fresco all-day poolside grill, six bars, and a wide range of water-sport and other fitness, leisure and entertainment facilities. In addition, guests will be able to take advantage of the usual Elegant Signature activities, including free water-sports, free Wi-Fi, beach and pool Ambassador service, kids and teens clubs, and bespoke tours and daily activities. From a strategic perspective, this will be Elegant Hotels’ first hotel offering outside Barbados and its first management contract, and it is expected to be earnings enhancing in FY18. The board of Elegant Hotels believes that management contracts of this kind represent a compelling opportunity to expand beyond Barbados, given they require far less capital investment than full ownership, and is therefore considering a number of other similar targets. Sunil Chatrani, chief executive of Elegant Hotels, said: “We are delighted to have signed our first ever management contract, which also represents our first foray outside of Barbados. Hodges Bay Resort & Spa will be a chic and distinctive luxury property that, like all of the hotels in our portfolio, offers outstanding accommodation, understated elegance, impeccable service, and the very highest standards of culinary expertise and leisure activities. We look forward to integrating the hotel into our existing operations and to putting our own unique stamp on it, while still retaining the property’s individual characteristics. The hotel will be a highly complementary addition to our collection, catering as it does for adults and families alike.”