Pubco benefits from strong property values as estate stimulates income
STAFFORDSHIRE pubco Punch Taverns has said full year trading has performed in line with expectations as the business focusses on continued growth in its estate.
In a full year trading update for the 12 months to August 20, 2016 the Burton-upon-Trent company said the average profit per pub across its entire estate had risen 4% over the year with the core estate seeing like-for-like net income growth of 1%.
The pubco said its retail division was operating ahead of expectations, with 177 pubs identified to operate under the Retail contract and 97 pubs trading or in the process of being converted.
New pub openings have been accelerated to around.150 pubs per year – up from previous guidance of 100-120 pubs per year, it added.
Duncan Garrood, CEO, Punch, said: “The business has ended the year with a solid set of results, in line with our expectations, and which reflects the completion of our strategic disposal programme.”
The firm said its balance sheet had been strengthened with nominal net debt reduced by approximately £225m – down 16% for the year. Nominal net debt to EBITDA leverage reduced to c.6.6 times (August 2015: 7.2 times).
The property estate was externally valued by GVA at c.£2,030m; c.£850m in excess of nominal net debt. The 2016 property valuation represents a net uplift of approximately £40m on the prior year valuation, after accounting for pub disposals.
Net nominal debt to property valuation reduced to 58% (August 2015: 64%) and the strategic disposal programme is now complete, having delivered ahead of expectations: with c.£83m generated by individual property and land sales.
Punch expects to issue its full year results for the period on November 8, 2016.
