UK: Punch Taverns upbeat on talks over capital restructuring
12:29 14 December 2012
PUBS group Punch Taverns said today it remained confident of agreeing a deal to restructure its £2billion debt pile as it reported steady trading in the opening weeks of its new financial year.
Punch, which owns more than 4,500 leased pubs, including about 150 in East Anglia, said average profit per pub had remained stable in the 16 weeks to December 8, despite the continuation of “challenging” market conditions.
Net income from the group’s core estate was down 5% on a like-for-like basis, but it said this was in line with management expectations in view of tougher comparatives for the first half of this year.
Trading comparatives were expected to improve during the second half when the business would also benefit from recent improvements in letting and investment activity, Punch said.
However, it added that net income for the core estate was still expected to decline over the current year as a whole, in line with the fall seen last year, as it rebalanced rents in response to trading conditions, with a return to annual growth not expected until 2013-14.
Punch said that its disposal programme of non-core pubs remained on track, with proceeds of £193million having been raised from the sale of 758 properties since beginning the programme in 2011, slightly ahead of book value.
A total of 86 pubs had been sold in the first quarter of the current financial year, including 11 from the core estate, generating proceeds of £26m, with around 400 non-pub properties expected to be sold during the year as a whole, it said.
In October, Punch reported a pre-tax profit of £64m for the 52 weeks to August 18, down nearly 16% from £76m the previous year, and revealed it was planning talks over restructuring its debt.
Yesterday, it said discussions with “certain major shareholders and other significant stakeholders” were continuing, and would be extended shortly to noteholders under its A and B securitisations.
“On the basis of the dialogue with stakeholders to date, the board continues to believe that a restructuring can be successfully implemented,” it added.
Punch chief executive Roger Whiteside said: “Our performance in the first 16 weeks of the financial year has been in line with management expectations.
“While the UK consumer environment is likely to remain challenging for at least the near-term, we continue to make good progress with our clear operational plan to return the core estate to growth in the medium-term and extract maximum value from our non-core assets.”