A key problem for Punch Taverns is its lumbering debt, and while we remain far from convinced of the merits of its shares, management's debt reduction efforts do deserve recognition.
The group has managed to hammer its debt down by more than £1bn since the start of the year, with the help of £350m from investors and the another £400m from the sale of pubs. It has also been able to buy in its debt at below face value from distressed sellers.
But while trading is showing signs of stabilising, conditions remain poor, and matters won't be helped by the sale of a number of high-quality pubs from Punch's estate. It's also noteworthy that Ted Tuppen, chief executive of rival Enterprise Inns, recently sold half a million pounds worth of stock following a similar rally in Enterprise's share price.
