There's a lot going on at the UK's second-largest pub group, with management at Punch Taverns (PUB) hitting a disposal milestone, rolling out a new operating model and developing excess space to generate another income stream. While bosses say its strategic disposal programme, which has generated £324m in the past two years, has finished, it seems that more pubs are set to go. Chief executive Duncan Garrood said another 400 pubs have since been identified for sale and will be sold at roughly 100-a-year for the next four years.
Its retail contract option, where Punch retains all revenue and cost of sales and pays the publican a percentage with which to remunerate staff, has proved popular, with 109 pubs trading under this model compared with 32 last November. The move was a response to new legislation which removed the so-called beer tie, which compelled publicans to buy drinks from their owners. Mr Garrood said only 40 pubs had asked for a 'rent-only' quote, with 20 opting to remain tied or leaving and 20 still deciding.
Analysts at Numis expect pre-tax profit of £51.6m in the year to August 2017, leading to EPS of 18.7p, compared with £52.9m and 18.8p in FY2016.
PUNCH TAVERNS (PUB) | ||||
---|---|---|---|---|
ORD PRICE: | 115p | MARKET VALUE: | £255m | |
TOUCH: | 112-117p | 12-MONTH HIGH: | 140p | LOW: 84p |
DIVIDEND YIELD: | nil | PE RATIO: | 4 | |
NET ASSET VALUE: | 353p | NET DEBT: | £1.18bn |
Year to 20 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2012 | 492 | 52.4 | 154 | nil |
2013 | 458 | 16.6 | 62.0 | nil |
2014 | 448 | -240 | -526 | nil |
2015 | 421 | -105 | -41.7 | nil |
2016 | 407 | 60.1 | 29.4 | nil |
% change | -3 | -157 | -171 | - |