PUNCH TAVERNS PLC
Update on Non-core Disposal Programme
Punch Taverns plc (“Punch” or the “Company”) announces an update to its guidance in relation to its ongoing disposal programme of non-core pubs.
The Company’s non-core division accounted for 18% of Punch outlet EBITDA at £43 million in the financial year ended 17 August 2013 and at 18 August 2013 comprised 1,106 pubs following the transfer of 116 pubs from the non-core to the core division at the start of the new financial year.
These pubs are predominantly small, wet led and have a much lower profit per pub (at c.£29,000) than core pubs. As previously announced, given the limited scope for investment, these pubs are more likely to be impacted by the long-term decline in drinking out and as a result are expected in time to generate more value through disposal than retention.
Following improved trading trends in the non-core division (with average profit per pub being down just 5% on the previous year), the Company expects it to take longer on average before non-core pubs become vacant and are therefore in a position to be sold. Accordingly, whilst the Company has not materially altered its view in relation to the total proceeds to be received from the non-core disposal programme, it now expects the disposal programme to take longer and for the profile of anticipated disposal proceeds to change from the profile previously announced. Set out below is the revised profile of anticipated pub proceeds from these non-core disposals:
Non-core disposal proceeds Punch A
(569 pubs) Punch B
(514 pubs) External
(23 pubs) Group
(1,106 pubs)
FY14 £35m – £40m £35m – £40m £1m £70m – £80m
FY15 £35m – £40m £25m – £30m £0m £60m – £70m
FY16 £20m – £25m £20m – £25m £0m £40m – £50m
FY17 £10m – £15m £15m – £20m £0m £25m – £35m
FY18 £10m – £15m £10m – £15m £0m £20m – £30m
FY19 onwards £35m – £40m £25m – £30m £0m £60m – £70m
Total proceeds £162m £144m £1m £307m
Guidance for total disposal proceeds for the current year (FY14) remains unchanged at c.£100 million with approximately £25 million of proceeds anticipated from the core division.
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Enquiries:
Punch Taverns plc
Tel: 01283 501 948
Stephen Billingham, Executive Chairman
Steve Dando, Finance Director
Media: Brunswick Tel: 020 7404 5959
Jonathan Glass, Mike Smith
Forward-looking statements
This announcement may contain certain statements about the future outlook for Punch. Although we believe our expectations are based on reasonable assumptions, any statements about future outlook may be influenced by factors that could cause actual outcomes and results to be materially different.