Punch to sell another 1300 pubs

Punch Taverns has revealed plans to sell a further 1,300 pubs. The disposals follow the 893 pubs shed over the past year as the company aims to reduce its portfolio from 6,700 to the 4,700 sites it has identified as having a “long term, sustainable future.”

The release of its full year results last week saw Punch unveil a £160 million loss following £253m in exceptional charges, mostly arising from pub impairments. The company also posted a 9% reduction of its net debt to £3,143m.

As with many of its rivals, Punch is rebalancing its business in a shift away from wet-led venues. Last week saw fellow pub operator Barracuda Group announce plans to dispose of 22 pubs from its 217-strong estate in order to focus on the success it has seen with the food-led, all-day offer of its Smith & Jones brand.

Unlike many of its competitors, Punch does not manage most of its pubs directly, but leases the majority to landlords. It is these leased pubs which have suffered most in recent times, with core earnings down by 11% last year.

Commenting on the full year results, Ian Dyson, who took over as chief executive of Punch Taverns a month ago, noted: “While we have been encouraged by more recent trends in both the leased and managed businesses, the economic environment is very difficult and there remains room for improvement across all aspects of our business.

I have started a comprehensive review of our strategy, operating performance and capital structure with a view to exploring options to create value for our shareholders.”

Gabriel Savage, 19.10.2010