Insider Media Limited

Staffordshire pubco Punch Taverns has revealed plans to demerge its managed pub division and reduce the number of leased properties to 3,000. The announcement came as a result of Punch’s strategic review, released this morning.

The pubco will reduce the number of leased pubs it operates by 500 per year, and will separate the leased and managed businesses with the demerger of the latter arm, Spirit.

Punch said that the demerger will complete before the summer, forming two public companies.

The company said that the decisions were made following a strategic review, which concluded that the group’s current strategy was “not sustainable”. In a statement, the company said there were “limited synergies” between the leased and managed divisions.

It added: “The managed business requires investment and development to accelerate its operational turnaround and drive growth. The leased business needs to be repositioned to maximise the long term value within the estate by downsizing to a core of around 3,000 high quality pubs.”

Ian Dyson, chief executive of Punch Taverns, said: “We believe that there is a significant value creation opportunity at Punch, with immediate upside in managed and longer term upside in leased. We do not believe that either opportunity can be maximised within the current group structure and accordingly, we propose that the two businesses be separated. This will be achieved by the demerger of Spirit and the creation of two independent public companies.

“A demerger will provide the platform to enable both businesses to focus on the very different strategies required to deliver shareholder value and will provide choice and liquidity for investors.”