Good trading helps Punch cut net debt

Punch Taverns, the country’s largest pubs group, said yesterday it expected full-year earnings to be slightly ahead of its previous expectations – reflecting a pub improvement programme, a good World Cup and sunny summer weather.

The company, which runs more than 7,100 pubs, said sales at pubs it directly manages, which have been open for more than a year, rose by 2.6 per cent in the fourth quarter to the end of August.

But Punch added in a trading update that profit falls at the pubs it leases to tenants are expected to be broadly in line with the first half of the year, because a rise in sales was offset by lower margin on drinks sales and reduced rental income.

Over the past year the pub chain sold off £300m worth of pubs and reduced its net debt by almost £700m? to £3.1bn.

The business also said it had refurbished more than 200 managed pubs over the past year. Punch said: “We expect the trading outlook in the near term to continue to be uncertain, particularly given the potential impact of the June budget on consumer spending into next year.”

The news comes as former finance director of Marks & Spencer Ian Dyson joins the company next month as chief executive. He takes over from Giles Thorley who left the heavily indebted firm in March.