UK pub giant to sell bars in advance of smoking ban
The UK’s biggest pubs group Punch Taverns may put as many as 1,000 of its pubs up for sale ahead of the forthcoming smoking ban, it was reported today.
Punch declined to comment, but a report in The Times said the company was looking to offload many of its smaller pubs that could see trading hit hard when the smoking ban comes in, such as those without gardens and the more traditional drink-led pubs that do not have a strong food-based focus. The company has around 9,300 sites.
Analysts said a move by Punch to sell its more vulnerable pubs was “unsurprising” and that it was a natural move for the group to overhaul its estate ahead of the ban, which is set to come into effect in Wales on April 2 and on July 1 in England.
Smoking is already banned in enclosed public spaces in Scotland, which saw the ban introduced last March.
A number of UK pub groups have been sorting through their pub holdings in advance of the ban, with Midlands-based Marston’s reportedly recently putting 280 of its smaller pubs up for sale.
Admiral Taverns is mooted to be a prime suitor for the Punch pubs.
The group bought 769 so-called “bottom-end sites” from Enterprise Inns last August for £318m (€468m) and is said to specialise in smaller community pubs.
Admiral was unavailable for comment.
JP Morgan analyst James Ainley said such a sale for Punch signals a refocus on its core strategy, concentrating on large, highly profitable food-based pubs.
The group has been selling off hundreds of unwanted pubs after a series of acquisitions, including the purchase of 1,830 pubs from rival Spirit last January and 82 sites from Mill House Inns last September.
Mr Ainley said many of the traditional drinks-led pubs would change hands across the sector, with some closures possible as a result of the ban.
He added: “Thriving locals will continue to thrive but it’s the pubs which don’t have a very strong local community business or a strong food offering and are relying on a traditional more drinking, smoking customer base are the ones that could suffer, alongside those with no outdoor space.
“But a good pub with a good landlord should continue to do well.”
Punch shares were up 37p, or 3%, at 1230p by midday on news of the pub sale speculation.
