Spirit Pub Company's self-help programme is producing impressive results. So much so that we are reversing out sell advice, which was clearly badly timed.
The share price outperformance is not without foundation as the operator of the Chef & Brewer and Flaming Grill chains has been performing nicely, too. It has been helped by a rebranding of most of its managed estate and a substantially improved food offering. These initiatives helped drive a 5.6 per cent rise in like-for-like sales in the 28 weeks to 3 March and, although the improvement tailed off during the second quarter from 6.2 per cent to 4.6 per cent, that is still impressive compared with industry trading data for January and February.
The group's tenanted pubs are finding the going tougher, with like-for-like net income per pub dropping 4.5 per cent during the half year and 6.4 per cent in the second quarter. However, there are hopes that things will pick up as issues associated with the de-merger from Punch Taverns are put behind the estate and management focuses on pepping up performance.
Broker Numis Securities expects EPS to rise from 5.3p to 6p in the 12 months to 20 August.
