Punch Taverns reports strong start to the year

 
Oliver Smith
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BRITISH pubs owner Punch Taverns said its earnings rose 1.4 per cent during the first 12 weeks of its new financial year, giving the firm a boost ahead of a debt restructuring vote.

“We have made a positive start to the financial year and our results are benefiting from the operational improvements we have made over the last 12 months,” said executive chairman Stephen Billingham yesterday.

The rise in the three months to 9 November marks the fourth consecutive quarter of improving income growth for Punch.

The firm retained its guidance at one per cent earnings growth for the current financial year.

“Profits are in line with our expectations and we have reiterated our guidance for the full year,” added Billingham.

Earlier this month Punch said it would reveal plans in December to restructure its £2.4bn debt pile after lenders rejected two earlier proposals put forward by the pub group’s board.

Punch, which has over 4,000 pubs in the UK, has already warned that it could be unable to continue trading unless a deal can be reached over its debt, which as built up after an acquisition spree in the last decade.

“Punch’s shares trade at big discount to Enterprise Inns. The new deadline for the bond restructuring is December; if it succeeds, this valuation gap should narrow, in our view,” said Numis analyst Douglas Jack, who gave the company’s stock a ‘hold’ rating with a target price of 10p.

Punch Taverns’ shares rose 2.3 per cent yesterday to 11.25p.