Punch puts 1,250 weakest pubs in turnaround division

Punch Taverns today confirmed plans to put 1,250 of its worst performing pubs into a turnaround division.

The UK's largest pub company said the new division would include pubs that have closed, as well as about 500 that had already been identified for disposal or conversion to alternative use.

The move was revealed as Punch announced interim results for the 28 weeks to 7 March. While pre-tax profit fell to £82m, compared with £133m the previous year, the company said it has seen modest improvement in performance since the end of the half-year.

Punch's net debt stood at £5b, up from £4.9b at the start of the period, after a £318m reduction in gross borrowings was outweighed by mark-to-market adjustments on interest rate swaps and loan notes.

Punch, which is thought to have put the "for sale" sign above its entire estate, sold 161 pubs during the first-half period, raising £91m.

Giles Thorley, Punch chief executive, said: "Given the ongoing challenges in the external operating environment, I am pleased to report that we remain on track to meet our expectations for the financial year.

"While we have seen a modest improvement in our performance since the half year, the weak UK consumer environment is likely to persist throughout the remainder of the year.

"Consequently, we remain very cautious over near-term trading prospects and we will continue to focus on taking prudent steps to further strengthen our balance sheet."

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By Daniel Thomas

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