Trading

Punch Taverns has completed its first full trading year following flotation in May 2002.  Preliminary results for the 53 weeks to 23rd August 2003 are expected to be announced on 6th November.

Trading has continued to be in line with the Board’s expectations.  Like for like turnover growth of 2.6% on a comparable 52 week basis was ahead of that reported for the first half of the year.  Margins continue to improve, and cash flow continues to be strong.

We have made excellent progress in improving the quality of our estate, with 539 pubs benefiting from capital investment in the year.  We have reorganised our resources to give better support to our retailers, and worked to strengthen relationships.  Our Retailer Charter is a major innovation in further developing a long term business partnership with our retailers.  We have continued to expand our retailer training programmes, with 716 delegates trained in the year.

We have also extended our estate, acquiring 283 pubs during the year whilst selling or delicensing 70, taking the overall estate to 4,515 pubs on 23rd August.

These activities demonstrate a successful year which has further strengthened a strong base upon which to continue the growth of our business.

Debt Financing

We are also announcing proposals to continue our long-term debt finance programme.  A circular is being issued today which seeks the approval of holders of the Group’s securitised debt for:

•   The merger of our two securitised structures into a single unified structure covering 4,300 of our pubs, and simplifying our administration
 
•  The issue of new fixed and floating rate notes to replace existing floating rate notes and to securitise pubs which are currently financed by short-term bank  facilities

Subject to obtaining requisite approvals, we expect to begin marketing the new notes during October.  We may tender for existing floating rate notes ahead of this time in order to assist implementation of the proposals.

The impact of this refinancing will be to increase our long-term securitised debt capacity from £1.4bn to approximately £1.8bn, whilst reducing the average cost of our securitised debt and creating additional funding for new acquisitions. 

After repaying existing short-term bank facilities, the refinancing will make approximately £250m of new cash available to the Group.  The issue will be structured so that this new cash will be available to meet requirements over time, thereby minimising any effect to gearing or interest cover.

Commenting on today’s announcement, Giles Thorley, Chief Executive said:

“This has been a year of significant progress in which we have consolidated and improved our business both operationally and financially. We have worked hard to improve relationships with our retailers, to help them build successful businesses and maintain strong organic growth.

“The planned restructuring of our debt will further improve our corporate efficiency and flexibility, and increase our capacity to fund acquisitions, where we see good opportunities to continue our momentum of profitable growth.”

Enquiries:

Punch Taverns plc Tel: 020 7868 8903
Giles Thorley, Chief Executive 
Robert McDonald, Finance Director  
   
College Hill Tel: 020 7457 2020
Matthew Smallwood  
Justine Warren