UK: Punch Taverns downbeat on pub sector prospects
Punch Taverns, the UK's largest pub owner, has warned that it sees no upturn in trading in the near future.
Consumers are spending less money in the on-trade and there is unlikely to be an improvement in the short-term, Punch said in a full-year trading update today (25 August).
Despite this, Punch said it would its meet full-year expectations. Like-for-like sales in the firm's managed pub estate for the 52 weeks to 22 August fell 1.4%, it said.
In its leased pub division, rent concessions to keep struggling pubs afloat has cost Punch GBP1.6m (US$2.6m) per month during the year, more than double the previous year and highlighting the pressure on the UK beer and pub sector.
Punch has established a "turnaround" division of 1,250 pubs. A third of these were disposed of during the year, but they will be replaced by a further 450 pubs in the near future, the group said.
There was more positive news on Punch Taverns' debt position. The group has paid off nearly a quarter of its net debt, around GBP1bn, during the year thanks to a GBP350m share rights issue, GBP400m of disposals and strong cashflow.
Punch and its rivals, including Enterprise Inns, are currently facing an Office of Fair Trading probe into their relationship with tenants.
Sectors: Beer & cider
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