After nine years at Punch Taverns, including the horribly rocky credit-crunch years, Giles Thorley is stepping down as chief executive.
Over recent years Mr Thorley has helped steady the ship by raising money from shareholders, scrapping the dividend and selling off pubs where possible. Nevertheless, the group he leaves is one that remains thoroughly at odds with the post-credit-crunch era and continues to battle against tough trading conditions. His verdict that the changes made provide the foundations for “long-term sustainable success”, will be seen as questionable by many.
Indeed, Punch’s massive debt is secured against the pubs it owns and these securitisation agreements mean cash from pubs can be withheld from the company, and therefore equity holders, if certain performance criteria are not met. Such a 'cash trap' has already been triggered on one securitisation and expectations are that two further traps may be triggered this year.
This ties Punch’s hands at a time when many of the tenants that rent out its pubs desperately need the group’s help as they face deteriorating trading conditions. At the same time, tough conditions in the pub-property market means it is no longer easy to simply sell on problem pubs.
When: 1 Oct 2009
Price: 121p
