Punch Taverns losses rise to £176m after £663m write down

Punch Taverns, the UK’s largest pub company, has seen annual losses triple to more than £170m after writing down the value of its estate by £663m.

Unveiling results for the 12 months to August 22, the group, which owns 7,600 leased and managed pubs, said losses rose to £176m (2008: £64.7m).

Pre-tax profits fell to £160.4m (2008: £262.3m) as beer sales dropped and tenants’ rent levels declined. Overall turnover fell by almost 8% to £1.44b.

Punch said the £663m write down had been made on pubs that have been identified as unlikely to generate long term sustainable growth, as well as those that had become unprofitable.

As well as the write down on the value of its pubs, Punch also took a £55m charge for the mark-to-market of certain interest rate swaps, a £29m provision for onerous leases, £8m of reorganisation costs and a £32m loss for selling pubs at less than their book value.

The group has cut net debt by 24% to £1.1b, helped by a series of debt buybacks and the sale of around 800 pubs, generating £414m. It plans to raise a further £200m through pub sales in the current financial year.

Giles Thorley, chief executive of Punch, said: "The trading environment remains challenging and lacks visibility, hence we remain cautious despite the measures undertaken.

“We are nevertheless confident that the significant progress we are making positions us well for the longer-term opportunities in the sector."

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By Daniel Thomas

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