Earnings slump at Punch as it continues to close down pubs

 
City A.M. Reporter
PUNCH Taverns’ profits fell by 20 per cent in the first half of the year, it said yesterday, but reassured it was on track to meet its full-year profit expectations despite weak consumer market conditions.

The tenanted-pubs business, which demerged its better-performing managed pubs division Spirit last year, said its pre-tax profit in the 28 weeks to 3 March fell to £33m from £41m a year ago.

Punch, which plans to dispose its non-core pubs over five years, said average net income per pub rose less than a per cent.

Like-for-like net income for core estate, which includes the pubs which the company plans to retain, declined 2.1 per cent.

Punch, which is in negotiations with bondholders to pay down its £2.2bn debt pile, said it reduced debt by three per cent during the first half, when it sold 214 pubs and other assets for £62m.

Chief executive Roger Whiteside said the group remained on track with its strategy to dispose between 400 and 500 non-core pubs for the full year, which will see it bring down the number of its pubs to about 3,000 from the current 5,004.

“Notwithstanding the continuing challenging climate we have a clear operational plan to return the core estate to growth in the medium-term and extract maximum value from our non-core assets,” he said.