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Interim Results for the 28 weeks to 5 March 2016

Performance in line with expectations:

  • Continued growth from a higher quality pub estate:
    • Average profit per pub across the entire estate up 3.0%
    • Core estate like-for-like net income* growth of 1.6%
    • Total estate (including non-core) in like-for-like outlet EBITDA growth
  • Underlying EBITDA of £94 million (March 2015: £105 million); reflecting the impact of £288 million of strategic disposals completed over the last 18 months
  • £59 million non-underlying profit on asset disposals in the period

Strengthened balance sheet:

  • Nominal net debt reduced by £191 million (14%) in the half year and by £293 million since the October 2014 refinancing
  • £235 million of cash on the balance sheet, no bank debt and low scheduled amortisation at c.£36 million per year over the next five years
  • Disposal programme ahead of target with £199 million of net proceeds:
    • £47 million – individual property and land sales; £12 million above book value
    • £53 million – package disposal of 158 non-core pubs (previously announced)
    • £99 million – disposal of 50% holding in Matthew Clark (previously announced)
  • Loan to value reduced to 59% (August 2015: 64%)
  • £847 million of property in excess of nominal net debt; equivalent to 382 pence per share

Good operational progress:

  • • Retail division operating ahead of expectations:
    • 121 pubs identified to operate under the Retail contract (50 pubs open at April 2016)
    • On track to have c.100 pubs open by the year end
    • Underlying profit and sales are ahead of management expectations
    • Anticipated pub EBITDA of between £90,000 and £110,000, representing a profit uplift of between £15,000 and £25,000 as compared to historical EBITDA under the tied tenanted and leased model
  • Mercury pub division formed to manage lower profitability sites under a reduced cost operating model. Targeting like-for-like growth in this division from the end of 2017 as we sign-up pubs on more flexible tenancy agreements
  • Growing commercial free-of-tie lease division with 41 pubs in operation with an average rent of £72,000
  • Strategic disposal programme is now substantially complete, with focus now on realising additional value from the non-trading parts of our extensive freehold property and land estate

Duncan Garrood, Chief Executive Officer of Punch Taverns plc, commented:

“We are already making good progress delivering on the strategy we set out in November 2015. We have launched new operating models, renewed our focus on customer service and delivered improved support to our publicans.

The roll-out of our new Retail contract is progressing well with underlying profit and sales post conversion being ahead of our initial expectations.

The combination of our growing cash balances, strong cash flow and limited scheduled amortisation over the next five years puts the Group in a stronger financial position going forward.”

20 April 2016

* Core estate like-for-like net income represents revenue less cost of drink sales (gross profit) for all pubs in the Core estate other than those operated under the Retail division.


Results: Punch Taverns plc — Tel: 01283 501 948
Duncan Garrood, Chief Executive Officer
Steve Dando, Chief Finance Officer

Media: Brunswick — Tel: 020 7404 5959
Jonathan Glass,
Joe Shipley

A presentation for equity and debt analysts on the interim results will be held today at 9.00am at The Lincoln Centre, 18 Lincoln’s Inn Fields, London, WC2A 3ED.

A live web cast and slide presentation of this event will be available here and subsequently available on demand. We recommend you login at 8.50am.

Forward-looking statements

This report contains 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.

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