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One of Britain's biggest pub chain's profits have plunged

Apr 20, 2016, 15:50 IST

Tony Hisgett/Wikipedia

Pub and bar operator Punch Taverns reported a massive drop in profits for the 28 weeks up to 5 March on Wednesday.

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First-half profit before tax plunged to £54.7 million ($79 million) from last year's £348.5 million.

Meanwhile revenue for the same period fell from £221.7 million to £212.9 million.

Punch Taverns began selling off 158 "non-core" locations last year in order to reduce its net debt, which is now £1.37 billion.

It seems to be having some effect, as average profit per pub grew 3%.

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Like-for-like net income from the "core estate" set of pubs grew by 1.6%.

Duncan Garrood, Punch Taverns CEO, defended the figures, saying the profit drops were part of an ongoing strategy to focus on its core venues:

We are already making good progress delivering on the strategy we set out in November 2015. We have launched new operating models, renewed our focus on customer service and delivered improved support to our publicans.

The roll-out of our new Retail contract is progressing well with underlying profit and sales post conversion being ahead of our initial expectations. The combination of our growing cash balances, strong cash flow and limited scheduled amortisation over the next five years puts the Group in a stronger financial position going forward.

Investors didn't seem to mind the news, as the share price rose this morning before settling at £10.07 as of 9:50 am GMT:

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Investing.com

Punch Taverns was formed in 1997 and has a nationwide portfolio of around 3,300 pubs according to its website.

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