Punch Taverns has issued its Interim Results for the 28 weeks to 1 March 2014, average profit per pub up 4% across the entire estate of 3,956 pubs, delivering profits in line with expectations.
Stephen Billingham, Executive Chairman of Punch Taverns plc, comments:
“We have delivered profits for the half year in line with our expectations.
“Our results reflect the significant operational changes we have made over the last 15 months which are now embedded in the business. We have returned the core estate to growth and delivered a 4% improvement in average profit per pub across our 4,000 pub estate.
“We are on track to deliver our full year profit expectations and start the second half of the year backed by the increased level of Partner operational support that will further strengthen the performance of our pubs.
“Proactive engagement on the restructuring discussions is continuing and we urge all stakeholders to support the covenant waiver requests to provide the business with stability and time to effect a consensual restructuring of the Group’s financing arrangements.”
Underlying financial performance – in line with management expectations
• EBITDA of £108 million (2013: £117 million)
• Profit before tax of £50 million (including £30 million of profits attributable to bond purchases) (2013: £26 million; no profits attributable to bond purchases)
• £305 million of cash reserves
• On track to meet our full year profit expectations
Operational highlights
• On target to deliver the business plan
• Average profit per pub up 4% across the entire estate of 3,956 pubs
Core estate
• Like-for-like net income up 1.4%, continued growth for three quarters
• New Partner enquiries from potential tenants up 40% on 2013
• 95% of the estate let to Partners on substantive agreements (up from 94% at March 2013)
• Investment programme on track with 170 core pub investments completed at an average spend of c.£90,000
• 36% of the 2,961 core pub estate now invested (over £40,000); up from 23% in 2012
• New field teams in place delivering enhanced levels of Partner support
• 90% of Partners registered on the Punch Buying Club
Non-core estate
• 116 pubs transferred to the core estate, leaving 995 pubs in non-core
• Non-core ‘protect’ and ‘sell-later’ pubs in like-for-like net income growth of 0.4%
Disposal programme
• Disposal programme on track
• 140 pubs and other assets disposed for £51 million, £6 million ahead of book value and at a multiple of 17 times EBITDA
Capital Restructuring
• Extensive engagement with a wide group of stakeholders is continuing and the Board remains of the view that a consensual restructuring is in the best interests of all stakeholders
• Punch A and Punch B launched covenant waiver requests on 7 April 2014 in order to obtain temporary waivers of their DSCR covenants and certain other provisions of the securitisation documents to provide further time to reach agreement on a consensual restructuring
• The covenant waiver requests require the support of all classes of noteholders and other securitisation creditors, with noteholder meetings convened for 29 April 2014