Preliminary Results for Punch Taverns for the 53 weeks to 23 August 2014 show performance in line with guidance, a positive start to the year, and the completion of the capital re-structuring. Stephen Billingham,Executive Chairman of Punch Taverns plc, commented:
“We have returned the core estate to like-for-like growth and delivered underlying profits for the year in line with guidance. We have also made a positive start to the new financial year with the core estate in like-for-like net income growth of 0.8% and have realised £43 million of proceeds from the sale of non-core and gold-brick sites.
“We believe that the capital restructuring completed last month creates a robust and sustainable debt structure, providing stability to the business that will lead to further deleveraging through strong cash generation.
“We can now focus on improving our business through investment in our pubs, attracting the best partners to work with us and providing industry leading support to our partners to launch and develop their pub businesses.”
Underlying financial performance* – in line with guidance
- EBITDA of £205 million (2013: £216 million)
- Profit before tax of £69 million (including £30 million of profits attributable to bond purchases in H1) (2013: £49 million; no profits attributable to bond purchases)
Operational highlights
- Delivering the business plan with steady progress in all areas of the business
Core estate (2,925 pubs)
- Like-for-like net income** up 1.3%, with growth for five consecutive quarters
- New partner applications up 20% on the prior year
- £43 million of investment spend in the core estate at an average of c.£100,000 per pub
- First full year of the New Business Development team, delivering double digit sales growth
Non-core estate (884 pubs) and disposal programme
- 116 pubs transferred to the core estate from the start of the financial year
- Disposal programme on track with the disposal of 285 pubs (including 65 from the core estate), realising net proceeds of £111 million, at a multiple of 19 times EBITDA
Capital Restructuring
- Capital restructuring successfully completed on 8 October 2014 delivering a £0.6 billion reduction in total net debt
- Robust balance sheet now in place: Proforma net debt to EBITDA ratio reduced to c.7.7 times; no bank debt, long-term amortising bonds with no term repayments until 2021 at the earliest
- Highly cash generative business with £200 million of net deleveraging targeted over the next three years
* before non-underlying items
** net income represents revenue less cost of drink sales (gross profit); growth rates are quoted on a 52 week versus 52 week basis to exclude the benefit of an extra week trading in FY 2014