Following Punch Taverns (PUB) from year to year is less a case of trying to assess the troubled pubco's operational performance and more of trying to predict how much of the business will be left to write about. Dealing with its mountainous debts means a 'for sale' hangs permanently over hundreds of the group's tenanted pubs. Analysts at broker Numis Securities estimate that another 1,100 pubs out of an estate of 4,096 will need to be sold over the next four years.
The disposal programme did make some progress, with another 433 pubs sold during the year for £149m, around 8 per cent above book value, which contributed towards a 6 per cent reduction in total net debt. Operationally, the so-called core pub estate, which generated 82 per cent of Punch's £216m cash profits, benefited from a slightly better fourth quarter as drinkers enjoyed the sunny weather. As a result, like-for-like net income declined by a better than expected 2.4 per cent.
As far as negotiations over the group's complicated capital structure are concerned, management expects a consensual restructuring for over £2.3bn of debt to begin in the following three months.
Numis forecasts flat current year pre-tax profits of £50m and EPS of 5.7p, rising to £52.1m and 6p, respectively, in 2015.
PUNCH TAVERNS (PUB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 14.75p | MARKET VALUE: | £98.2m | |
| TOUCH: | 14.5-15p | 12-MONTH HIGH: | 15.75p | LOW: 6p |
| DIVIDEND YIELD: | nil | PE RATIO: | 5 | |
| NET ASSET VALUE: | 44p* | NET DEBT: | £2.29bn | |
| Year to 17 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 607 | -335.4 | -134.8 | nil |
| 2012 | 492 | 52.4 | 7.7 | nil |
| 2013 | 458 | 17.0 | 3.2 | nil |
| % change | -7 | -68 | -58 | - |
*Includes intangible assets of £176m, or 26p a share | ||||
