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Punch Taverns make slow headway
Punch Taverns Plc, Britain's biggest pub group, in its year end trading statement for the 52 weeks to 21 August 2010 today, said full-year earnings before tax and exceptional items marginally ahead of its previous expectations. The company, which has over 7,100 pubs, stated that its recent trading momentum is consistent, continuing to benefit from higher operating standards, increased pub refurbishment activity and favourable summer weather.
In Punch Partnerships, the group's leased and tenanted division, profits remain under pressure, owing to lower drinks margin together with reduced rental income from returned pubs. This division is still costing Punch £24 million a year in financial support to failing tenants, and 14% of it's pubs are not tenanted on substantive agreements. Though sales volumes have improved over the final quarter, like-for-like profit decline would be broadly in line with the rate reported for the half year.
In Punch Pub Company, the managed division, like-for-like sales were down 2% in the 52 week period and improved trading was delivered in the second half, particularly in the final quarter, where like for like sales for the last 12 weeks were up 2.6%.
Punch have sold pubs to the tune of £300 million during the year and reduced debt by £684 million to £3.1 billion.
The company expects 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 shares closed last night at 78.2p valuing the company at £502 million, but since last year the shares have lost 25% of their value.
In Punch Partnerships, the group's leased and tenanted division, profits remain under pressure, owing to lower drinks margin together with reduced rental income from returned pubs. This division is still costing Punch £24 million a year in financial support to failing tenants, and 14% of it's pubs are not tenanted on substantive agreements. Though sales volumes have improved over the final quarter, like-for-like profit decline would be broadly in line with the rate reported for the half year.
In Punch Pub Company, the managed division, like-for-like sales were down 2% in the 52 week period and improved trading was delivered in the second half, particularly in the final quarter, where like for like sales for the last 12 weeks were up 2.6%.
Punch have sold pubs to the tune of £300 million during the year and reduced debt by £684 million to £3.1 billion.
The company expects 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 shares closed last night at 78.2p valuing the company at £502 million, but since last year the shares have lost 25% of their value.
Tue, 24th Aug 2010