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Interim Results for the 28 weeks to 4 March 2017

Corporate Developments:

hareholders approved the sale of the Group to Vine Acquisitions Limited on 10 February 2017 for 180 pence per share. Completion of the sale is expected (subject to competition conditions) before the end of August 2017.

Financial highlights:

  • Like-for-like net-income1 decline of 1.2% in the leased and tenanted estate, including the Mercury division (H1 2016: 0.7% growth), but flat after adjusting for the impact of the previously flagged temporary slow-down in letting activity;
  • Underlying adjusted EBITDA1 of £88 million (H1 2016: £94 million); reflecting the impact of £53 million of disposals completed over the last 12 months;
  • Progress in reducing interest costs with the £65 million early repayment of junior notes in November 2016;
  • Strong liquidity, with £131 million of cash on the balance sheet, no short-term bank debt and low scheduled amortisation at c.£36 million per year until 2021;
  • Increased pub investment with £41 million of total capital expenditure (H1 2016: £25 million), supporting the roll-out of the Retail division;
  • Continued good progress in realising value from our extensive property portfolio with £18 million of net disposal proceeds (H1 2016: £100 million), £5 million above book value (H1 2016: £13 million);
  • Statutory loss before tax of £174 million (H1 2016: £55 million profit), includes £198 million of non-underlying charges, principally due to the write-down in goodwill and assets following shareholder approval on 10 February 2017 for the sale of the Group.

Operational progress:

  • Doubled the size of the Retail pub division since the August 2016 year end, with 171 pubs open and trading as at April 2017 (August 2016: 85 pubs);
  • Launch of a new innovative operating agreement, designed to be a simpler version of the Falcon Retail contract, targeted towards smaller drinks led pubs. We opened our first pub under this new agreement in April 2017;
  • Recent market uncertainty resulting from the sale of the Group has impacted letting activity, together with the previously reported impact of the new Pubs Code Regulations. Consequently, we now expect it to take up to 12 months to return to our long-term target of having a core estate of 93%-95% let on substantive agreements;
  • Continued progress with the Mercury pub division (management of lower profitability sites under a reduced cost operating model), on-track to deliver like-for-like net income growth in this division from the end of 2017;
  • Growing commercial free-of-tie lease division with 57 pubs in operation with an average rent of £71,000;
  • Tight control over central costs with short-term cost savings offsetting the previously announced cost increases from additional resource to support the execution of our strategy.

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

“During the period, we have doubled the size of our Retail estate and continue to innovate our operating agreements. This has been achieved whilst managing through a period of significant change, ahead of the sale of the Group which is now expected to complete before the end of August 2017.”

4 May 2017

1 In the reporting of financial information throughout the Interim Report, the Directors have adopted various Alternative Performance Measures (APMs). APMs are presented in order to supplement reported results by providing further clarity on the Group’s underlying performance and to present additional information that reflects how the Directors monitor and measure the progress of the Group. Definitions of each of the APMs included in the Interim Report and how they reconcile to reported measures can be found on note 14.


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

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

The interim results presentation and audio cast is available on our website,

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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