Punch says demerger is on track
PUB OPERATOR Punch Taverns reported an improved underlying financial performance in the 28 week period to 5th March, with strong growth in Managed houses and improving trends in Leased. It said it is on track to meet full year expectations.
The Burton-based group said plans for a demerger between its managed and leased pubs, which it announced last month, are on track, and said that WH Smith chairman Walker Boyd was to be appointed chairman of Spirit plc when the demerger took place. Spirit will take on Punch’s mainly South East focused managed estate, as well as converting some leased properties to managed. The core group’s remaining 5,241 pubs will be cut to around 3,000, said Punch.
EBITDA was £206m (2010: £225m) and profit before tax £61m (2010: £66m). Basic earnings per share were 7p (2010: 7.5p).
The group reported strong cash generation with Free Cash Flow of £55m. There was a statutory loss after exceptional items of £325m.
There was a net exceptional charge of £370m, £367m of which was a non-cash impairment to turnaround assets. Basic loss per share after exceptional items was 50.5p.
Net asset value per share was 189p (125p excluding goodwill).
Walker Boyd, aged 58, is non-executive chairman of WH Smith, a position he has held since 2010. He was group finance director at Signet Jewellers Limited, for 15 years.
Punch CEO Ian Dyson said: “We are delighted to welcome Walker to the board. He brings a significant amount of consumer and City experience to the team, having held senior leadership roles in both UK and US listed companies working in challenging market environments. I look forward to working with him closely, both in the run up to demerger and in his role as Chairman of Spirit plc.”
Commenting on the group results, Mr Dyson said: “We are pleased that our operational initiatives continue to translate into improved performance within both the Managed and Leased businesses.
“Despite the challenging UK consumer environment, we remain confident of making further progress in the second half of the financial year. We have had a good start to the third quarter and are on track to meet our full year expectations.
“This strong trading momentum provides a solid platform for the proposed demerger of Spirit, on which we are making good progress.”
