Punch Taverns First-Half Profits up 12%

Punch Taverns said profit before tax and asset sales increased 12% to £130 million ($260 million) in the first half, after what the pub group called an extremely active period.

The pub group said the conversion of the smaller Spirit group pubs to lease is on track to complete by August 2007, with 519 lettings now agreed.

Punch said it is too early to assess the impact of the smoking ban on the group's pubs in Wales, following the introduction of the smoking ban there on April 2. However, it said experience from Scotland showed pubs which were well prepared for the ban, as well as those that have developed their food offering, have performed well.

It said the smoking ban will undoubtedly have an impact on trading at some pubs, but added it is well prepared to optimise this and ultimately to benefit from changes in consumption patterns. Punch said the value of its property is now better recognised by the investment markets and added it will actively consider all ideas that may add further value, including conversion to Real Estate Investment Trust. It said its current view is that best long-term returns for shareholders are provided by our current business structure, but said it continues to keep all options under review.

The tenanted pub specialist with an estate of around 8,400 pubs following the disposal of 869 less-profitable pubs to Admiral Taverns said second-half trading was in line with expectations.

It raised its interim dividend by 16 pct to 5.1 pence.