Punch has reported Preliminary results for the 52 weeks to 22 August 2015, with underlying financial performance reflecting reduced non-core estate and in line with expectations:
- Underlying EBITDA of £196 million (2014: £205 million);
- Statutory loss before tax of £105 million includes £166 million of non-underlying charges, principally due to the capital restructuring and transition to accounting for properties at market value.
Clear plan for the future
Duncan Garrood, Chief Executive Officer of Punch Taverns plc, commented:
“Since joining in June, I have undertaken a detailed review of the business and today I set out a clear plan for the future. In recent years, Punch has been at the forefront of change within the leased and tenanted pub sector. The conclusions announced today represent an evolution of our existing plan. It is also designed to address the many structural and regulatory changes impacting our market.
Our strategy enables us to maximise the value in our properties through a phased, lower risk approach to addressing an evolving pub market, taking greater control of the property and retail offer, but without the added overhead that comes with directly employing pub staff.
We have already made significant steps towards evolving our operating model and financial position, and while we have a lot to do, we are well placed to deliver on our plan.”
Higher quality pub estate
- Core estate now expected to deliver c.95% of pub profits in the 2016 financial year (up from 88% in 2014);
- Positive like-for-like trends in net income; core estate net income up 0.3%;
- Average profit per pub up 4%, benefiting from the disposal of non-core pubs.
Stronger balance sheet
- Property estate externally valued at £2,097 million; £692 million in excess of nominal net debt;
- Nominal net debt down £513 million in the year to £1,406 million;
- Consolidated nominal net debt : LTM EBITDA at 7.2 times (2014: 9.5 times)
- Post year end disposal of non-core assets (including the disposal of our 50% investment in Matthew Clark for gross proceeds of £100.7 million; and pub disposals of £53.5 million) further enhance our ability to pursue our strategic objectives.
Review of Strategic Priorities – The Way Forward
- Delivering a clear, consistent consumer offer, adapting to changing consumer behaviour;
- Comprising a broad range of flexible operating models that are in line with today’s evolving pub market;
- Underpinned by a re-organisation of management to drive operational excellence;
- Built on an attractive offer, delivering real value to the publicans through the Punch Buying Club; and
Supported by releasing additional value from under-utilised property portfolio and land bank.