Pub group pulls no punches

Punch Taverns has painted a rather bleak picture for the future of the traditional British pub, claiming that the decline in drinking out will continue indefinitely.

While reporting a fall in half-year profits, the company, which last month announced it is to split its managed and leased pubs into two separate listed companies, said: “The long term decline in drinking out in pubs will continue, driven by changing consumer behaviour, relative price positioning and the impact of regulation.”

The company has written down the value of more than 2,000 pubs it has put up for sale by £367m.

Excluding the write-down and other exceptional charges, Punch reported a pretax profit of £61m, down from £66m last year. Revenue slipped 3% to £655.4m.

Like-for-like sales at the group’s managed pubs rose 4.9% over the full year, an by 8.2% in the second half.

Chief executive Ian Dyson is confident the upturn in sales will help the company meet full-year targets.

“We are pleased that our operational initiatives continue to translate into improved performance within both managed and leased businesses,” he said.

“Despite the challenging UK consumer environment, we remain confident of making further progress in the second half of the financial year.”

The company, which last year reported debts of £3.3bn, has suffered double-digit declines in profits for the past two years.

Alan Lodge, 13.04.2011