​Strategic Growth Drives Punch Pubs’ 44% Profit Surge

Punch Pubs has reported a significant boost in profits, with a 44% increase in operating profit for the financial year ending 11 August 2024. The UK-based pub operator attributed much of this success to its ongoing strategy of rapid site acquisition, which has expanded its portfolio and solidified its presence in the competitive pub market.

During the 2024 financial year, Punch Pubs generated £48.4 million in operating profit, a substantial rise from the previous year’s £33.7 million. Revenue also climbed by 3%, reaching £324.3 million compared to £313.5 million in 2023. The company’s revenue growth reflects steady consumer interest, supported by a year-on-year increase in like-for-like sales across its three core divisions: leased and tenanted, management partnerships, and the Laine Pub Company.

A significant aspect of Punch’s success this year was the addition of over 50 new pubs, including 14 sites acquired from Aprirose, a real estate investment company, in September. This acquisition followed a strategic purchase of 24 pubs from Milton Three, the operator of the Wear Inns portfolio, which went into administration last year. The newly acquired sites are expected to contribute additional earnings, aligning with Punch’s goal of consistent revenue expansion through site acquisitions.

Punch’s underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) totalled £91.2 million for the financial year, with further expected contributions from its recent acquisitions. Specifically, the company projects an incremental £3.4 million in EBITDA from the 36 pubs acquired in the third and fourth quarters. In addition, £2.8 million in projected cost-saving efficiencies are expected to be realised within the coming year, supporting further growth in profitability.

The final quarter of the financial year saw Punch Pubs achieve £26.2 million in underlying EBITDA, marking a 19% increase from the same period in 2023. Investment remained a key focus, with Punch allocating £8.2 million towards capital expenditure for pub improvements, alongside £8.1 million dedicated to new acquisitions. Additionally, Punch disposed of eight pubs during the quarter, yielding £3.8 million in proceeds.

As of August 2024, Punch Pubs holds a total of 1,258 pubs, with 92% of these properties owned outright or on long-term leases. Following the end of its financial year, the group expanded further with the acquisition of an additional 18 pubs, expected to generate an added £2.3 million in EBITDA during their first year under Punch’s management.

Punch’s strategic approach—balancing acquisitions, disposals, and targeted investments—demonstrates a clear commitment to growth and profitability in the evolving pub sector. By leveraging its freehold properties and expanding its footprint, Punch appears well-positioned to continue this upward trajectory.