PUB GIANT SELL-OFF AS LOSSES ROCKET

PUNCH TAVERNS saw losses almost treble last year.

It was forced to write off £663million against the value of its pubs.

Britain’s second-biggest pubs group saw its shares tumble by 19¼p to 96½p as losses widened from £65m to £176m for the year to August following the impairment charges against properties unlikely to generate long-term growth.

Without the one-off charges, pre-tax profit fell 39% to £160m. Chief executive Giles Thorley warned the future was uncertain, with higher taxes and rising unemployment likely to take their toll on how much customers spend.

The company has paid off £1.1billion debt to bring its total burden down to £3.9bn through a combination of buying back bonds, a rights issue and selling off pubs.

Thorley said the group hoped to raise £200m by selling a further 400 to 500. It raised £414m selling 800 pubs last year.

“We are going to end up with between 5,000 to 6,000 pubs in our leased estate (rented out to tenants), and around 750 in our managed estate,” said Thorley.

At its peak, Punch owned around 8,500 pubs and was Britain’s biggest landlord. It now owns 7,600 pubs.

Thorley denied the company was selling off its “crown jewels”.

Punch is looking to retain larger pubs, where costs are lower and are capable of generating a higher growth.

The pub industry has endured a torrid two years with the smoking ban and the recession.

Astaire Securities analyst Mark Brumby said: “Punch’s debt reduction has been impressive. The group is pulling the correct levers, but is facing an uncertain future.”

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