Punch Taverns (LON:PUB) CEO Says Company’s Turnaround Will Take Time
Shares in Punch Taverns have rallied by 12.86% over the last 30 days.
Punch Taverns PLC one of the UK’s largest pub and bar operators today released its full year results showing a slight improvement in profitability from it’s pubs however still being heavily pressured by its debt obligations.
The company said “Punch has the right foundations in its business to deliver value for the longer term, but it will take time… the company must modify its proposition in light of legislative changes to maximise the opportunity from changing consumer trends.”
In the businesses full year update the company made a statutory loss before tax of £105 million which included £166 million of non-underlying charges which the company cited as being due to the capital restructuring and transition costs whilst the average profit per pub was up 4%.
Duncan Garrood who joined Punch as chief executive in June 2015 from franchise operator MH Alshaya said:
“Since joining in June, I have undertaken a detailed review of the business and today I set out a clear plan for the future. In recent years, Punch has been at the forefront of change within the leased and tenanted pub sector. The conclusions announced today represent an evolution of our existing plan. It is also designed to address the many structural and regulatory changes impacting our market.
Our strategy enables us to maximise the value in our properties through a phased, lower risk approach to addressing an evolving pub market, taking greater control of the property and retail offer, but without the added overhead that comes with directly employing pub staff.
We have already made significant steps towards evolving our operating model and financial position, and while we have a lot to do, we are well placed to deliver on our plan.”
In October 2014 the pub group gained the approval required for its restructuring proposal which allowed it to cut net debt by a quarter to £1.8 billion. Bondholders now own 85 percent of the company’s equity after existing shareholders stocks were heavily diluted.
