Punch Taverns sees profits rise

Rising food and energy prices mean consumers have less to spend on beer

Punch Taverns posted a 1% rise in pre-tax profit to £133m in the 28 weeks to 1 March and said it remained cautious over trading conditions.

Punch, one of Britain's biggest pub groups, said that like-for-like sales at its leased pubs fell 2% while sales at its managed pubs fell 2.8%.

Weaker sales reflect "challenging" market conditions, it said.

The group is looking elsewhere for acquisitions after it ended talks with troubled pub firm Mitchells & Butlers.

Punch Taverns withdrew its proposal to merge with the owners of the All Bar One chain last month. It had proposed paying Mitchells & Butlers' shareholders £175m for the company.

The changing economic climate made the group less attractive, Punch chief executive Giles Thorley told reporters on a conference call. He declined to say which potential acquisitions it was looking at.

'Cautious' outlook

Lack of consumer confidence, rising fuel and food prices as well as alcohol duty have all hit disposable income.

"Whilst we remain cautious over short-term trading conditions for the sector, we are confident that we are well positioned as we move into a more positive environment over the summer months and pass the anniversary of the smoking bans in England and Wales," said Mr Thorley in the statement.

With basic earnings per share up 1% at 39 pence, the group raised its interim dividend 8% to 5.5 pence.