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Morning Briefing for pub, restaurant and food wervice operators

Tue 15th Apr 2014 - Breaking News - Punch Taverns – average profit per pub up 4%
Punch Taverns – average profit per pub up 4%: Punch Taverns has reported it’s on track to meet full-year expectations, with an average uplift of 4% in profit per pub across 3,956 sites in the 28 weeks to 1 March. The company reported Ebitda of £108 million (2013: £117 million) and profit before tax of £50 million (including £30 million of profits attributable to bond purchases) compared to £26 million in 2013 with no profits attributable to bond purchases. It has £305 million of cash reserves. Like-for-like net income was up 1.4% in the core estate, with continued growth for three quarters. New enquiries from potential tenants are up 40% on 2013 and 95% of the estate is let to licensees on substantive agreements (up from 94% at March 2013). The company’s investment programme is on track with 170 core pub investments completed at an average spend of circa £90,000. Some 36% of the 2,961 core pub estate is now invested (at a level of over £40,000), up from 23% in 2012. A total of 90% of licensees are registered on the Punch Buying Club. In the non-core estate, 116 pubs have been transferred to the core estate, leaving 995 pubs in non-core. 140 pubs and other assets have been disposed for £51 million, £6 million ahead of book value and at a multiple of 17 times Ebitda. On its capital restructuring, the company reported ‘extensive engagement with a wide group of stakeholders is continuing and the Board remains of the view that a consensual restructuring is in the best interests of all stakeholders’. The company added: “Punch A and Punch B launched covenant waiver requests on 7 April 2014 in order to obtain temporary waivers of their DSCR covenants and certain other provisions of the securitisation documents to provide further time to reach agreement on a consensual restructuring. The covenant waiver requests require the support of all classes of noteholders and other securitisation creditors, with noteholder meetings convened for 29 April 2014.” Executive chairman Stephen Billingham added: “We have delivered profits for the half year in line with our expectations. Our results reflect the significant operational changes we have made over the last 15 months which are now embedded in the business. We have returned the core estate to growth and delivered a 4% improvement in average profit per pub across our 4,000 pub estate. We are on track to deliver our full year profit expectations and start the second half of the year backed by the increased level of Partner operational support that will further strengthen the performance of our pubs. Proactive engagement on the restructuring discussions is continuing and we urge all stakeholders to support the covenant waiver requests to provide the business with stability and time to effect a consensual restructuring of the Group’s financing arrangements.”
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