Punch pulling itself off the canvas

Mr Garrood said 31 of Punch's pubs had already adopted the 'retail contract' option, whereby the company retains all the sales and cost of sales but pays the publican a percentage with which to remunerate staff. This model means Punch also takes responsibility for back-of-house administration, freeing pub managers to focus on their customers. Mr Garrood claimed the switch had already yielded results, with sales up 15-20 per cent in those pubs operating under the system. He expects 100 pubs to have opted for retail contracts by August 2016.

Punch is also trialling a fully managed pub, but the number of these is likely to remain small. Finally, management is offering a commercial free-of-tie deal, which is likely to suit its premium and food-led pubs (about 16 per cent of pubs). The company has partnered with fish and chip chain Harry Ramsden's in some locations.

Management is budgeting for as many as 400 pubs to cut their drinks tie with the company in the year to August 2017, with up to 300 per year following suit in subsequent years. But Mr Garrood said the company would work to ensure that its Punch Buying Club - whose economies of scale in purchasing should theoretically push down drinks prices and utility bills for landlords - would help maintain interest in the tied model. Also to keep publicans on board, management has earmarked £250m-£300m over the next five years for investment in pubs over which it has greater control.

House broker Numis Securities expects pre-tax profit of £50.9m in the current financial year, leading to EPS of 18.1p, compared with £60.9m and 25p for the year ended August 2015.