A leading analyst has said that although Spirit Pub Company’s Q1 trading was in line, with underlying performance now closer to the industry run-rate of 1.5%-2%, the change of valuation of its estate leaves some unanswered questions for its final results on 16 October. Geof Collyer at Deutsche Bank said: “Spirit has changed the way it values its pub assets. This is essentially bringing the valuation methodology into line with the way the assets are valued amongst some of the peer group and within Spirit’s securitisation. The provisional move will bring assets down from £1.8bn to £1.3bn. However, the asset value in the 2011 debenture accounts is £1.6bn, implying a possible £200m-£300m asset downgrade based on FY’12’s results reporting in October.” Collyer said that the group’s performance was slightly better than his forecasts, maintaining the strong series of quarterly positive lfls that the group has recorded going back to Q4’10. He said: “Comparing this period with last year’s and aggregating the performance, Spirit’s lfls are +7.9% and Greene King’s +7.8%, with both groups leading the lfls momentum table. Where they differ is that on the analyst call, it sounded like Spirit’s underlying performance was now closer to the industry run-rate of 1.5%-2%, whereas Greene King’s underlying rate is around twice that, having increased by a percentage point over the past year.” In terns of the group’s leased estate, Collyer pointed out that he trend here is not moving in the right direction. He said: “Though half of the decline is down to the rolling off of lease premia amortisation and rent rebasing. This process will impact H1’13 as well, which is in our forecasts. Disposals now seem to be more H2 weighted and that should mean the absolute fall next year in profits is likely to be down around 10% again.”