Spirit keeps afloat but Punch suffers a blow

A tale of two pub companies today from Punch Taverns and Spirit, the businesses that demerged from each other last month.

Spirit is home to 900 "managed" pubs deemed to have a good future. Punch has more than 5000 which are leased to freelance landlords where the going is much tougher. Spirit, led by the former finance and operations boss at Marks & Spencer, Ian Dyson, said sales are strong - up 3.8% in the 12 weeks to August 20. "We have the right plans to make progress," Dyson said, adding: "We are feeling good about things."

Punch, led by Roger Whiteside, said sales fell 5% in the fourth quarter. More than 2000 of its boozers are in what it calls the "turnaround division" - they are in effect for sale should buyers be willing.

Dyson revealed today that the disruption of the London riots hit trade.

Up to 40 Spirit pubs were closed on each of the two main riot days but only two were seriously damaged.

Punch is grappling with debts of £2.5 billion, compared with equity of around £63 million.

Landlords say that the "tie" deal which forces them to buy beer from Punch makes it difficult to compete, or in many cases stay afloat.

Spirit is valued at close to £275 million.