Observers believe the change in name of Punch Retail to Spirit Group last week is a signal that a flotation of its sister company, Punch Pub Co, is imminent.
The name change is necessary to avoid confusion between the two businesses. A flotation of Punch Pub Co could happen as early as next month, and most City analysts believe it will certainly happen by July. However, Spirit is unlikely to come to market until next year, observers believe.
However, there are doubts about how well the float will go. A successful flotation will hinge on its ability to make it sound attractive too prospective shareholders, the Financial Times said last week.
Much of the business is already mortgaged which begs the question, what is left for shareholders, the Financial Times says.
The newspapers said it would be a complex task explaining its structure. It pointed out that Punch is one of the "high priests" of securitisation and, with Punch Retail/Spirit, has raised more than £2bn by selling big investors the right to pocket future cash flow.
Punch hopes the value of the pubs will have risen when securitised borrowing is paid back providing a boost for shareholders. But this assumes property prices go up.
Karen Jones, chief executive of Spirit, Punch Group's managed pubs arm, said her company would not be coming to market at least until Punch Pub Co, Punch Group's tenanted pub company, completes its own flotation plans "later this year".
Spirit, which controls 1,046 pubs averaging £8,000 a week each in sales, is likely to record turnover of about £440m in the year to August, Jones said. It is the UK's third-largest managed pub chain after those of Six Continents and Scottish & Newcastle.
Jones said the pubs had suffered from years of under-investment before Punch acquired them, and Spirit would be investing up to £45m a year from cash flow into the estate. She said: "The heartland of our estate is the local pubs," and the chain was blessed with "fantastic sites" offering plenty of opportunity for growth.
Spirit is expected to have an enterprise value of about £1bn, about half that of Punch Pub Co, which has 4,250 tenancies, while its debt is understood to be about £650m.
The name change is necessary to avoid confusion between the two businesses. A flotation of Punch Pub Co could happen as early as next month, and most City analysts believe it will certainly happen by July. However, Spirit is unlikely to come to market until next year, observers believe.
However, there are doubts about how well the float will go. A successful flotation will hinge on its ability to make it sound attractive too prospective shareholders, the Financial Times said last week.
Much of the business is already mortgaged which begs the question, what is left for shareholders, the Financial Times says.
The newspapers said it would be a complex task explaining its structure. It pointed out that Punch is one of the "high priests" of securitisation and, with Punch Retail/Spirit, has raised more than £2bn by selling big investors the right to pocket future cash flow.
Punch hopes the value of the pubs will have risen when securitised borrowing is paid back providing a boost for shareholders. But this assumes property prices go up.
Karen Jones, chief executive of Spirit, Punch Group's managed pubs arm, said her company would not be coming to market at least until Punch Pub Co, Punch Group's tenanted pub company, completes its own flotation plans "later this year".
Spirit, which controls 1,046 pubs averaging £8,000 a week each in sales, is likely to record turnover of about £440m in the year to August, Jones said. It is the UK's third-largest managed pub chain after those of Six Continents and Scottish & Newcastle.
Jones said the pubs had suffered from years of under-investment before Punch acquired them, and Spirit would be investing up to £45m a year from cash flow into the estate. She said: "The heartland of our estate is the local pubs," and the chain was blessed with "fantastic sites" offering plenty of opportunity for growth.
Spirit is expected to have an enterprise value of about £1bn, about half that of Punch Pub Co, which has 4,250 tenancies, while its debt is understood to be about £650m.
