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Punch Taverns today cut the value of its pub estate by £663 million, a move that would slice billions off industry finances if its rivals followed suit.
The pub giant said the “in-use” value of its pubs — how much they are worth as businesses rather than as properties — had tumbled in the recession.
Asked why others have not made the same move, chief executive Giles Thorley replied: “We are curious as to that. Right now, if you turn around to people and say valuations are the same as three years ago, they wouldn't believe you.”
Thorley has dragged Punch through the worst year of its existence, though tough times still remain.
“It's been hard for everyone, but people wrote us off quite quickly. I always thought that we would trade through, but we are reliant on people enjoying themselves and consumer confidence is still low,” he added.
Punch made a profit of £160 million for the year to 22 August, down by more than £100 million. Dividends have been binned.
It has cut debt by £1 billion this year through redeeming bonds and selling off 800 pubs.
Reader views (3)
20 years and at least 17 monopoly and OFT enquiries led to the supply of beer orders. This loony no idea government allowed the pubco's to drive a coach and horses through it. Now you are seeing the results! Obviously the smoking ban did not help but the business model tried to turn the clock back 25 years and it was not going to happen. Restrictive trading methods and unfair trading practises are for fools, idiots and Nu-Labour supporters.
- Mike, London
The pub industry has been dragged into decline by the pubcos, predominantly Punch and Enterprise Inns, over the past decade. The faulty design of the pubco model has fractured the estates, with over 40 publicans going bankrupt a week. Changes have to be made. Landlords are bleeding estates dry to pay unsustainable debt. Questions should be asked of those responsible.
- Christopher Scholey, London
It is always easy to spot a Punch owned pub. Drab and expensive. This is a business that has lost direction - the directors should resign and let a new team bring in better management before more shareholder value is destroyed.
- Simon Ellis, London
