Profits are suffering at Punch Taverns, Britain’s second-biggest pubs group, but the firm today said it was on track to sort out a long-running row over its £2 billion-plus debt pile by the end of the year.
Punch has been involved in lengthy negotiations with bondholders over renegotiating its complex debt structure where loans to the company are split into two securitised vehicles.
The company put forward proposals June for a new debt structure to its cash interest payments to about £32 million a year and slash its debt pile by £500 million over the next five years.
Punch said talks had taken longer than expected but believes that a “consensual restructuring” can be carried out by the end of the year. The firm has sold 1100 pubs since 2011 to bring down debts, leaving it with about 4000. Of these, another 1000 are earmarked for sale over the next four years.
Pre-tax profit for the year to August were down by 23% to £49 million but income from pubs in its “core” estate returned to growth in by the end of the year, executive chairman Stephen Billingham said.
The nation’s oldest brewer Shepherd Neame saw a 22% decline in pre-tax profits to £7.1 million for the year to June 29 after a one-off overhaul of warehousing and distribution. But the company enjoyed double-digit sales of beers such as Spitfire over the summer.
