Pub operator Punch Taverns has seen pre-tax profits fall to £66m in the 28 weeks to 6 March, from £82m in the previous year and could dispose of 1,200 more tenanted pubs.
But when changes in the valuation of properties were taken into account, the company made a £70.3m pre-tax profit in the 28 weeks to 6 March, compared to a £121.6m loss last year. Sales in the first half of this year dropped 12% to £676.6m.
However, the company pointed to an improving market, with financial support for its tenants stabilising at £2m a month and a 40% drop in the number of tenants having to hand back the keys to their pubs.
The company has also made more progress in paying down another £188m of borrowings, leaving it a net debt of £3.28bn. At its peak eighteen months ago, Punch debt stood at a total of around £4.5bn.
Punch indicated to City analysts that it wanted to retain a core of 5,000 tenanted pubs, some of which are showing growth, which implied the disposal of a further 1,200 properties, according to Langton Capital's Mark Brumby.
Meanwhile in its managed division, the company said it had replaced 40% of its managers in a bid to improve performance.
The company has also signalled that it may allow its tenants to buy beers from small brewers.
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By Neil Gerrard
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