Spirit Pub Company has reported a slowdown in like-for-like sales growth in its managed arm in the 12 weeks to 18 August, along with an acceleration of the decline in its leased estate, and announced that it has revised downwards the value of its property by £500m. Like-for-like sales in its managed arm were +4.1%, against +4.8% across the 52 weeks, with food like-for-likes at +4.5% (52 weeks: +6.4%) and drinks sales at +3.3% (52 weeks: +3.8%). Spirit said: “Our Managed pubs division delivered another quarter of solid growth, notwithstanding volatile trading conditions and the adverse impact of both the wet summer and the Olympics. With further improvements in our people, brands, properties and infrastructure we continue to significantly outperform the market and to deliver good growth in both drink and food sales reflecting our broad portfolio of high-quality Managed brands.” Leased like-for-like income fell 5.4% (52 weeks: -4.9%). “It was another challenging quarter for our Leased estate as performance continued to be impacted by current year rent rebasing,” Spirit said. “Our prime focus remains on improving performance in the division and creating shareholder value. As part of delivering these objectives, we continue to develop the framework for our alternative operating models and will update the market on our progress at our preliminary results presentation.” Spirit announced in April its intention to commission an independent report on the open market valuation of its pub estate. The firm said today that, based on the results of this review, the Board has decided to change the company’s accounting policy to move to an open market valuation basis which it said will give “greater transparency on the underlying value of our property assets than the previous method based on historic cost”. “As the majority of our properties are held at historic acquisition cost, this will result in our properties being valued at c£1.3bn, a net downward accounting adjustment of c£0.5bn versus the previous book value of £1.8bn. “This will consist of a c£0.6bn exceptional, non-cash charge in the income statement and c£0.1bn balance sheet valuation credit. The final results of this valuation and accounting policy change, which has no impact on our cashflow or on any of our financial covenants, will be disclosed at the time of our preliminary results announcement in October.” Mike Tye, chief executive, said: “We have finished the year strongly despite challenging trading conditions created by the poor summer weather and the disruption caused by the Olympic Games. Our Managed estate performance remains significantly ahead of the market and we continue to implement measures in our Leased estate to improve performance. Whilst the consumer environment remains tough, we continue to perform in line with expectations and are making good progress towards realising the full potential of our business.”