Punch Taverns PLC

Description:

 

Telephone:

01283 501 600

Activities:

Punch Taverns is one of the UK’s largest leased and tenanted pub companies and a 50% stakeholder in drinks wholesaler Matthew Clark.

The group was founded in December 1997 when a group of entrepreneurs including PizzaExpress founder Hugh Osmond and Café Rouge entrepreneur Roger Myers bought
1,399 leased Bass pubs through a securitisation deal.  It grew rapidly in 1999 with the acquisition of 3,500 Allied Domecq pubs and the 688-strong Inn Business estate – and would have been even bigger if it had succeeded in its bid for Whitbread’s 3,000 strong estate in 2001.

Allied’s branded managed outlets were put into a newly-created division, Punch Retail, which was rebranded the Spirit Group in 2002 prior to a demerger of the 1,040-strong managed business that left Punch with 4,250 leased and tenanted pubs.

Punch set about quickly rebuilding its numbers, delaying its post-merger flotation over an unsuccessful bid for Nomura’s Voyager and Unique estates of 4,189 pubs. Its biggest buys were Pubmaster’s 3,115-strong estate in 2003 and 1,064 Innspired pubs in 2004, when it announced its ambitions to grow from 8,300 to 12,000 outlets.

The first move was to regain the now 1,832-strong managed Spirit Group for £2.7b in late 2005, boosting its estate to 9,500-plus venues. It earmarked around 670 Spirit sites to sell and 740 to transfer into its core leased business.

After flogging off 869 leased and tenanted pubs to Admiral Taverns in early 2007, Punch set its sights on Mitchells & Butlers (an early joint bidder with Punch for Spirit) and submitted an £11b merger offer in early 2008 that would have created a group with 10,500 outlets (one in six of the UK's total 58,000 pubs).  However, the offer diluted from solo to joint offers and fizzled out with unsuccessful talks for M&B to buy Spirit’s 836 venues.

Having overstretched itself during the credit boom and with its business model coming under increasing government scrutiny, Punch turned its attention to reducing its £5b debt to £3.5b in 2009.  During the year, it put 1,250 under-performing pubs into a turnaround division, raised £350m from a share issue, cancelled more than 33% of its convertible bonds and announced plans to sell at least 14% of its pub portfolio.

In 2011, Punch and Spirit again split into separate companies in a move that left Punch with around 5,080 pubs and it has since been reducing its estate to a core of 3,000 profitable venues.

In 2014, the focus is on restructuring its £2.3b debt.

Key People:

Executive chairman Stephen Billingham
Finance director Steve Dando
Chief operating officer Neil Griffiths

Commentary:

Operating Data:

Number of leased/tenanted pubs Nearly 4,000

Financial Snapshot:

Full year to 17 August 2013
Turnover £457.6m (2012:  £491.7m)
Pre-tax profit £49m (2012: £64m)
Ebitda £216m (2012: £238m)

Half year to 1 March 2014
Pre-tax profit  £50m (2013: £26m)
Ebitda £108m (2013:  £117m)

Address:

Jubilee House
Second Avenue
Burton upon Trent,

UK