Punch Taverns plc : New lease agreement steps up co-investments with Punch

Date 27 January 2012 Title New lease agreement steps up co-investments with Punch Press Release Punch Taverns, the second largest operator of leased pubs in the UK, is looking to step up co-investments with the best licensees in the sector after early success with its new lease agreement. The company's new lease scraps rent reviews unless a licensee requests one and allows licensees to earn market rate discounts on beer sales if they over-perform. This new deal has led to more entrepreneurial licensees choosing to take Punch pubs, not least because the company is happy to consider co-investment schemes.   One example is the Riverside Pub & Kitchen at Farndon, near Newark, which received a £500,000 investment from the company and its tenants James Bull and Ross Tunaley. It's been transformed into a contemporary village pub, making the most of its stunning location next to a river. The pub is the first site for Bull who previously gained experience in the trade during a 13-year career at Probably a Pub Company, the multi-site operator that has a number of Punch pubs. Bull and his business partner Tunaley, who has a background in finance, have set up a company called Distinctive Inns to open more quality pubs in the East Midlands. They have a second Punch pub lined-up in Nottingham, where there is another £500,000 joint investment planned. Punch chief executive Roger Whiteside said: "The Riverside is typical of the way we intend to invest in our core estate to create the best leased estate in the UK - our licensees and our pubs will receive the investment they need to ensure they are the best pubs of their type in the UK." Another example of co-investment is the Bull in Watton at Stone, near Stevenage, where Punch and licensees Alistair and Anna Bramley co-invested £240,000. Punch invested around £150,000 while the Bramleys chipped in with £90,000 to create a warm and welcoming village local. This year, Punch will invest £40m in around 400 core pubs, which is an average of £100,000 per pub. Whiteside added: "The fundamental change in mindset in Punch has been to recognise that we can't succeed at the expense of our licensees. We have had to find ways of growing profits for both ourselves and our licensees. We have undertaken a complete overhaul of the way we do business in order to create a solid platform on which we could return to growth in our core pubs, which are now receiving considerable investment. Co-investments are proving a very successful way of allowing licensees to realise their vision for a particular pub."