Spirit Pub Company has issued its Interim Management Statement covering the third quarter of the financial year (to 24th May). Mike Tye, Chief Executive, commented:
“We remain pleased with the strong performance over the quarter, with both divisions continuing to demonstrate the benefits of investment in our estate, infrastructure and people. In our Managed division, we have now commenced our planned expansion of the estate and we continue to see the benefits of the turnaround in the Leased division.”
Numis reacted favourably to the figures, recommending Spirit as a ‘Buy’, commenting that trading is strongly ahead with Managed pub LFL sales up 6.0% in Q3 and up 5.2% after 40 weeks, and that the current EV/EBITDA rating ‘does not properly reflect Spirit’s management and brand quality, earnings growth (13% in H1), progressive dividend (up 6% in H1) and de-gearing (to 4.4x net debt/EBITDA this year)’.
| Managed | 12 weeks to 24th May 2014 |
40 weeks to 24th May 2014 |
| Like-for-like Net Sales | +6.0% | +5.2% |
| Like-for-like Food Sales | +4.8% | +4.8% |
| Like-for-like Drink Sales | +7.1% | +5.2% |
Managed pubs have continued to trade strongly ahead of the market maintaining the good momentum in both food and drink sales, and roll out of the Flaming Grill brand has continued through acquisition and the conversion of pubs from the existing estate.
| Leased | 12 weeks to 24th May 2014 |
40 weeks to 24th May 2014 |
| Like-for-like Net Turnover | +2.5% | +3.0% |
| Like-for-like Net Income | +5.3% | +3.6% |
This is the third consecutive quarter of net income growth in the Leased estate, illustrating the continuing benefit of turnaround actions.