Debt restructuring sends Punch into the redBy Edward Devlin, Senior Digital Staff Writer
Burton-headquartered pubco Punch Taverns has plummeted to more than £240m in the red after being hit by costs totalling £309m following the restructuring of its £2.3bn debt mountain.
Executive chairman Stephen Billingham remained positive highlighting the return to like-for-like growth of its core estate and underlying profits meeting expectations.
Punch finally completed its long-running capital restructuring process after winning the backing of noteholders who own the majority of the complex securitisation vehicles used to fund the group in September. The move reduced net debt by £600m.
However, the group has been stung by large charges, including £27.3m for capital restructuring, redundancy and other related one-off costs, £50.8m of impairment losses and £214.4m for recycling of hedge reserve linked to the securitisation vehicles.
It leaves a pre-tax loss of £240.2m for the year to 23 August 2014, compared with a profit of £16.6m 12 months earlier.
On an underlying basis, before costs and charges, EBITDA in the period was £205m, down from £216m, and pre-tax profit was £69m, including £30m attributable to first half bond purchases.
Stephen Billingham said: "We have returned the core estate to like-for-like growth and delivered underlying profits for the year in line with guidance.
"We have also made a positive start to the new financial year with the core estate in like-for-like net income growth of 0.8 per cent and have realised £43m of proceeds from the sale of non-core and gold-brick sites.
"We believe that the capital restructuring completed last month creates a robust and sustainable debt structure, providing stability to the business that will lead to further deleveraging through strong cash generation."
The core estate of 2,925 pubs recorded a 1.3 per cent increase in like-for-like net income for the year with growth for five consecutive quarters. Punch's total revenue for 2013/14 was down from £457.6m to £448.1m.