Punch Taverns plc 2007 Annual Report and Financial Statements

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Business review continued Strategy Our overriding objective is to continue to maximise the long-term shareholder value of the Group. Our strategy to date of investment and acquisition has delivered excellent returns for shareholders. We have always believed that the property component of our business is a highly valuable constituent of the model. Whilst we are constantly seeking to maximise the use and the value of the real estate, we will continue to evaluate other ways (including REITs) of extracting the best value from our assets and maximising shareholder returns. Our current business structure and the use of long-term amortising investment grade debt has continued to demonstrate its robustness during a period when financial markets have tightened. Management changes Punch continues to ensure that we have a management team of the highest calibre to match the aspirations for the success of the business. During the year there have been a number of changes to the management team. In January, Phil Cox stepped down as Chairman of the Group. Phil was involved with Punch prior to flotation in 2002 and has been a major contributor to the success of the business. He was succeeded by Peter Cawdron who has been on the Board since 2003 and brings a wealth of experience as a Director of GCap Media plc, Compass Group plc, ProStrakan plc, Capita Group plc and Johnston Press plc. In April, Deborah Kemp took over from Adrian Fawcett as Managing Director of the leased business and on 8 November 2007 we announced her appointment to the Board. Deborah has been with the Group since 1998 and has extensive experience of both the property and operations side of the business. In September, we announced the retirement of Robert McDonald as Finance Director. Robert, with 25 years of experience in the sector, provided the Group with a huge amount of support during the early years as a public company. He has been replaced by Phil Dutton, former Chief Financial Officer of Matalan plc, who joined the Board as a Non-executive Director in January 2007. Finally, we announced on 8 November 2007 the appointment of a new Board Director. Mark Pain joins the Board as an independent Non-executive Director. Mark is currently Chief Financial Officer of Barratt Developments plc and was previously Group Finance Director of Abbey National Group plc. Current trading and outlook Since the year end and to the date of this report, the managed estate has traded broadly in line with last year’s sales levels, with an increased proportion of the sales mix coming from food. In the leased estate the growth trends seen in the second half of last year have continued into the current financial year. Whilst the sector is experiencing a degree of uncertainty and is not without its short-term challenges, we remain confident about the long-term future prospects for our business. Punch benefits from an extremely high quality pub estate and the Group has never been in better shape to face any future challenges. Over the last 18 months the quality of our estate has been significantly transformed, our acquisitions have been fully integrated and synergies delivered, and there is clear evidence that the financial health of our retailers remains robust. We continue to see good opportunities to grow the business and have an excellent platform in place from which we can further develop and progress. Spirit Academy We have refreshed our whole approach to Pub Manager training, developing completely new courses which are delivered through our refurbished Learning and Development Academy in Northampton. It takes a manager around six months to complete the programme. Managers undergo three levels of Academy training and in between courses spend time gaining practical management experience in the Spirit estate. They are required to prepare and implement a practical action plan after each level, which is later assessed by their Business Development Manager. Restructuring our Punch Taverns leased operations team The foundation of our relationship with our retailers is through our Business Relationship Managers (BRMs). To further enhance the support we provide to retailers in their pubs we have introduced 26 Operations Managers, the majority of appointments being made from our pool of BRMs. The Operations Managers are responsible for developing and coaching a team of five BRMs. The increased level of support for the BRM will enable us to deliver greater value as well as consistent business advice, which helps our retailers build stronger relationships and businesses in the future. Pub Managers graduating from the Academy. 10 www.punchtaverns.com Michael Bridger accepting this year’s BRM of the Year Award.
Passionate about our people ATTRACTING THE BEST PEOPLE TO RUN OUR PUBS AND CONSTANTLY STRIVING TO DELIVER HIGH STANDARDS OF CUSTOMER EXPERIENCE Melanie, one of our Team Players, pours the perfect pint
Page 1 and 2: Passionate about our pubs Punch Tav
Page 3 and 4: Punch Taverns: Our Punch Taverns le
Page 5 and 6: Operational highlights • We conti
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Page 11 and 12: Operational review Overview The fin
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3 Analysis of expenses The followin
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7 Employees and Directors continued
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9 Earnings per share continued The
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12 Goodwill and intangible assets O
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14 Trade and other receivables 18 A
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15 Deferred tax continued Company F
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20 Financial liabilities continued
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Punch Taverns plc Annual Report and
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25 Share-based payments continued D
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25 Share-based payments continued S
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27 Other reserves Group Equity comp
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28 Net debt continued (c) Reconcili
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30 Disposals On 17 September 2006,
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31 Pensions and other post-retireme
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31 Pensions and other post-retireme
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32 Operating lease commitments - mi
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34 Related party transactions conti
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Five year financial record Group tr
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Punch Taverns plc Annual Report and
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The paper used in this report is fu
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