Spirit Pub Company, the demerged managed house arm of Punch Taverns, has the potential to grow to an estate of at least 1,200 pubs, according to chief executive Mike Tye. While declining to set a timescale, Tye said: “Internally we have very clear targets and there is a five-year business plan in place. All six of our brands are established, though some are still pretty young, and the brands we’ve got will support 1,200 pubs. There’s lots to go for.” Speaking to Publican’s Morning Advertiser, sister title of M&C Report, Tye admitted that when he joined the business in 2007, he “thought it was in pretty poor shape” but “also saw a huge potential”. “No one had spent money making sure the basics were right. You can’t have a pub with wallpaper hanging off the wall, the toilets not fixed. Why would anyone want to go back into that environment? “I had to change mindsets – or I had to change people. You can’t push water uphill with a rake. That’s not being harsh, it’s a fact of life. Now, today, we’ve got a fantastic team.” Spirit posted a 6.2% increase in like-for-likes in the first 16 weeks since last August’s demerger, and Tye believes it’s most of the way through the ‘optimisation’ phase of the company’s turnaround. “Debt has come down really well, from seven or eight times EBITDA to five times. We’ve done a really good job there – and the best way to get debt down is to get your profits up. “It took a year to stabilise the business, now we’re putting in place operational excellence, the right calibre of people, the compelling brands, the infrastructure to do business. I would say that’s 70% complete. “When that’s done we can grow and buy more pubs.” Spirit currently operates 800 managed houses and will transfer, or sell, the remainder of its leased pubs. A 1,200-strong estate will make it the second largest managed pubco behind Mitchells & Butlers. Meanwhile, Spirit is believed to have completed the refurbishment programme of its 135-strong Chef & Brewer concept, with plans to expand it to as many as 200 sites.