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Punch Taverns, the UK's largest pub owner, has reported net losses of GBP122m (US$180m) for the 28 weeks to 7 March, as the country's on-trade continues to struggle.

Punch said today (29 April) that GBP184m in write-down charges, including a GBP147m impairment charge on its pub portfolio, were responsible for the loss. The group reported profits of GBP87m for the same period a year ago.

Net sales for the 28-week period fell to GBP768m, down from GBP813.5m a year previously.

Punch's announcement comes one day after the British Beer and Pub Association (BBPA) said that UK beer sales fell by 8% in the first quarter of 2009, the worst performance since 1997. Up to 39 pubs are closing every week, BBPA figures show.

Punch said that its results were in-line with the firm's expectations and that it has reduced gross debt by GBP318m, a decrease of around 7%, in the year-to-date. Seeking to reassure investors, it added that it has no refninancing requirements until 2010.

The group made GBP91m in disposals of non-core assets during the 28-week period.

It has also created a "Turnaround Division" consisting of 1,250 of the firm's worst-performing pubs, or around 17% of the group's total pub estate.

The division contributes around 7% of operating profit and Punch signalled that many would not survive, at least as part of the Punch portfolio. It said: "The division also includes the c.500 pubs, which, as previously reported, were identified as being unlikely to generate long-term sustainable growth; the disposal of these underperforming or non-core assets is progressing well."

Punch CEO Giles Thorley said: "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."

The group added: "Underlying trading performance into the third quarter of the current financial year has shown no further deterioration, indicating that our actions to stabilise performance are seeing some success."


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