Punch Taverns chief resigns

City A.M. Reporter
BRITAIN’S biggest pubs firm Punch Taverns said yesterday chief executive Giles Thorley is to stand down from the board after seven years at the helm during which the company’s debt rose to record levels.

Punch, which has over 7,500 pubs across Britain, said it was well advanced in the process of appointing a successor as chief executive and added there will be “an orderly transition of management”.

“The past two years we have faced the worst recession for a generation and significant structural and political challenges to the industry,” Thorley said in a statement yesterday.

“We have made good progress in reshaping our business and balance sheet, stabilised our operating performance and have taken the right actions to position Punch to achieve long-term sustainable success,” he added.

The company has been selling underperforming pubs and buying back bonds in order to reduce its borrowings, which were built up largely through its £2.7bn acquisition of Spirit Group in 2007.
Despite that, net debt stood at a crippling £3.35bn last December, over six times the company’s equity value.

The company has seen its profits hit by the impact of the recession, above-inflation tax rises and cheap booze offers in supermarkets contriving to keep drinkers at home.

In the face of such challenges, it has been spending around £2m each month to help struggling tenants stay afloat, through rent concessions and product discounts.

Shares in Punch closed on Monday at 81.25p, valuing the business at £530m.