Punch to cut value of pubs as profits fall
PUBS group Punch Taverns is expected to slash the value of its estate by more than £600m as it unveils a 40 per cent dive in annual profits on Wednesday.
The struggling pub group is heavily weighed down by its portfolio of 8,300 pubs, which have suffered a sharp fall in value during the property market slump.
Earlier this month the company announced it was selling 300 of its pubs, shortly after a shareholder urged Punch to sell the total portfolio and wind the business up.
Schroders fund manager Andy Brough, who owns a 3.4 per cent stake in the pub group, said it would be in investors’ interests if the struggling pub group called time on its pubs to “pay back its debts and return whatever’s left to shareholders”.
Analysts are predicting the group will post annual profits of £161m, down from £262m the year before.
Earlier this year Punch launched a £350m rights issue to pay down some of its £4bn debt mountain and announced it has reduced its net debt by £1bn.
The group said last month that the final quarter of its financial year was affected by mixed weather, with a warm June and early July summer weather boosting trade, but more recent rainy conditions hitting demand.
But Punch could be dealt a further challenge from a campaign group made up of its angry landlords, threatening to withhold payment.
The action group called Pub Revolution says it is “fed up” with what it claims is “unfair bullying.”
FAST FACTS PUNCH TAVERNS
Punch Taverns runs 8,300 pubs across the UK.
Despite launching a £350m rights issue, the group is still struggling with its £4bn debt mountain and is selling off pubs to raise funds.