(Adds dropped word "the" in paragraphs 1 and 9)
By Aastha Agnihotri
Sept 3 Spirit Pub Company Plc's
like-for-like sales were ahead of the market in the fourth
quarter as value-for-money deals attracted more customers to its
franchises, boosting its full-year expectations.
Shares in the company, which was split from Punch Taverns
Plc in 2011, rose as much as 5 percent, making the stock
one of the top percentage gainers on the London Stock Exchange
on Wednesday morning.
Spirit Pub, known for its pubs such as Chef & Brewer, Fayre
& Square and Flaming Grill, said it expected full-year results
to be above market expectations.
Analysts on average expect Spirit Pub's full-year pretax
profit at 57.1 million pounds($94.1 million), on revenue of
790.8 million pounds, according to Thomson Reuters I/B/E/S.
Like-for-like sales rose 2.1 percent at managed pubs in the
12 weeks to Aug. 16, with drink sales outpacing food sales, the
"Any growth that we've had has been driven by our own
self-help because the market is more or less overall flat in
food and may be very slight growth in alcohol," Chief Executive
Mike Tye told Reuters.
The company has been pushing its food menus to attract more
customers, driven by UK consumers' growing appetite for eating
out at places with value offers rather than at expensive
Spirit Pub, which has over 750 managed pubs, said it
acquired 11 pubs into managed division in the fourth quarter and
they are expected to generate returns materially ahead of cost
The managed-pubs business accounts for nearly 90 percent of
Spirit Pub's revenue.
Analysts at Numis Securities said that the "increasing
visibility on like-for-like profit growth, high cash returns,
faster expansion and net debt reduction (growing cash reserves)
should bring the re-rating the company deserves".
The brokerage has a "buy" rating on the stock with a target
price of 110 pence.
Net income at Spirit Pub's leased estate rose 4.8 percent in
the fourth quarter. Leased pubs are tenanted and run by
pub-keepers who pay rent and are dependent on the company for
their beer supply.
Britain's top managed-pub and restaurant chains witnessed a
collective like-for-like sales growth of 2.2 percent in July,
according to data collected from 28 of Britain's larger pubs and
restaurants by market research company Coffer Peach Business
British pub and breweries group Greene King Plc
reported a 4.1 percent rise in full-year comparable retail sales
in July, helped by newly acquired sites.
Shares in Spirit Pub were up 2.6 percent at 79 pence at 0910
(1 US dollar = 0.6070 British pound)
(Reporting by Aastha Agnihotri in Bangalore; Editing by