Punch Taverns on track despite profits dip
- Credit: Archant
Pub group Punch Taverns is set to post a slight fall in annual earnings as it continues to offload pubs to cut its debt pile.
The firm, based in Burton-upon-Trent, said in an update it expects to report underlying earnings of between £193 million and £200 million in the year to August 22 in line with expectations, compared with £205 million the previous year.
The UK’s second biggest landlord with around 3,500 pubs said it reduced its debt by £513 million in the period to £1.4 billion, adding that the value of its estate stands at £2.1 billion.
Last October Punch completed a deal to restructure £2.3 billion of debt, having been saddled with large liabilities after embarking on a major expansion before the financial crisis.
Punch Taverns chief executive Duncan Garrood said: “The business has ended the year with a solid set of results, in line with our expectations.
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“The business has clear plans for further debt reduction and will benefit from being able to focus more resources on the higher quality core pub estate.”
Last week the group agreed to sell 158 pubs to property firm NewRiver Retail for £53.5 million as part of its strategy to dispose of less profitable pubs.
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It added the sale left it with around 2,900 pubs in its core estate, and about 550 non-core outlets. The deal is expected to complete on September 11.
It said that over the financial year to August 22, its disposals reached £89 million - ahead of its guidance.
The group said its higher quality core estate generated an average profit per pub around 4% higher than a year earlier.
It added that its core estate is expected to turn in around 95% of its pub earnings in the next financial year.
Punch will report its full-year results on November 12.