6th Jan 2014 09:15
LONDON (Alliance News) - Punch Taverns PLC Monday said it expects the disposals of its non-core pub assets to take longer than it had previously expected, although it expects total proceeds to be the same as it had predicted.
In a statement, the pub operator said the disposal programme had been delayed by an improvement in trading at the non-core pubs, meaning it will take longer on average before the pubs become vacant and can therefore be sold. Average profit per pub is now down 5% on the previous year in the disposals portfolio.
The non-core pubs accounted for 18% of Punch outlet earnings before interest, tax, depreciation and amortisation at GBP43 million in the financial year ended August 17, 2013. At the start of the current financial year, the portfolio comprised 1,106 pubs. Most of them are smaller outlets with a lower profit per pub, at about GBP29,000, than the company's core pubs.
It still expects to make proceeds of about GBP100 million from disposals in the current financial year, of which GBP25 million will come from the core portfolio.
Punch Taverns has been restructuring in recent years after it wqas hit hard by the financial crisis, economic downturn and sector issues including the ban on smoking in pubs. It has been selling off assets to help it restructure its indebted balance sheet.
The company gave the following disposals programme update.
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 |
Punch Taverns shares were flat at 12.75 pence Monday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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