Punch writes off 663m of its pub estate

Debt-laden pubs firm Punch Taverns yesterday said its annual losses had jumped to &pound;406m after it wrote down the value of its estate by &pound;663m.<br /><br />Punch, which own over 7,600 pubs, said its pre-tax profit for the year to 22 August fell 39 per cent to &pound;160m compared with &pound;262m the year before. <br /><br />Following the writedown, Punch said the value of its pub assets and investments had been revised down to &pound;5.4bn, equivalent to a net asset value of 260p per share.<br /><br />Punch, the second-biggest leased and managed pubs operator in Britain, said it had taken an impairment charge on the value of struggling pubs. <br /><br />It said the pubs were unlikely to grow in the long term and that their profitability had been significantly affected by market conditions.<br /><br />Punch said it reduced net debt by over &pound;1bn to &pound;3.47bn over the financial year, easing concerns over its long-term future.<br /><br />It has embarked on a programme of selling underperforming pubs and buying back bonds in order to reduce its borrowings. The group has disposed of 800 pubs so far. <br /><br />It has also raised &pound;375m through a share issue and suspended its dividend payments. <br /><br />&ldquo;Punch&rsquo;s debt reduction has been impressive,&rdquo; said Astaire Securities analyst Mark Brumby. <br /><br />Chief executive Giles Thorley said the group raised &pound;414m through disposals last year and anticipates raising another &pound;200m in the current year. The group said sales had fallen by eight per cent to &pound;1.44bn.<br /><br /><strong>FAST FACTS </strong> PUNCH TAVERNS<br />&9679; Punch Taverns is the UK&rsquo;s second largest leased and managed pubs operator<br /><br />&9679; It has struggled to cope with its &pound;4bn of debts<br /><br />&9679; Punch has sold around 800 pubs and raised &pound;375m to reduce its debt burden