Punch Taverns plc, the UK’s leading pub operator of over 8,300 leased, tenanted and managed pubs, today announces interim results for the 28 weeks ended 7 March 2009.

Highlights

Financial Performance*

• Results in line with management expectations
• EBITDA of £275 million (2008: £323 million)
• Profit before tax of £82 million (2008: £133 million)
• Basic earnings per share of 23p (2008: 36p)
• Strong cash generation, enabling a 7% reduction in the gross debt position by 29 April 2009
• Disposals to 29 April 2009 of £91 million, comprised largely of non-core assets.  Disposals in line with book value and immediately earnings accretive after retiring Group debt

Statutory Results (after exceptional items)**

• Loss after exceptional items of £122 million following an exceptional charge of £184 million. All of the exceptional charges were of a non-cash nature except for £7 million of reorganisation charges
• Exceptional items include a £147 million charge for pub impairments

Management Actions and Priorities for 2009

• Strengthen operational management teams
• Stabilise operating performance
• Improve cash flow
• Reduce debt levels

Capital Structure

• Since the year end, and to the date of this report, we have reduced gross debt by £318 million (7%), significantly ahead of schedule
• No refinancing requirements before December 2010
• Our actions in repaying certain tranches of debt has helped maintain headroom against our financial covenants
• Based on our current projections we anticipate that we will meet the restricted payment condition within both the Punch A and Punch B securitisations this financial year
• We are making good progress with our disposal programme and with realising value from our unsecuritised assets held outside of the securitisation structures

Giles Thorley, Chief Executive of Punch Taverns plc, commented
 
“Given the ongoing challenges in the external operating environment, I am pleased to report that we remain on track to meet our expectations for the financial year.”

“While we have seen a modest improvement in our performance since the half year, the weak UK consumer environment is likely to persist throughout the remainder of the year.  Consequently, we remain very cautious over near-term trading prospects and we will continue to focus on taking prudent steps to further strengthen our balance sheet.”

“Punch Taverns’ business is dependent on the sustainable future of the British pub. Despite the economic challenges, we have responded quickly to provide assistance to our licensees and to protect the future of as many of our pubs as possible.  During these challenging times we believe that arguments put forward by some that the beer tie is the cause of the problems facing the industry is a divisive, non-productive distraction from the core underlying issues and ignores the impact of the recession, tax and regulation on small businesses like pubs.”

“We have made good progress in divesting of non-core assets and using the proceeds to pay down debt.  While we continue to look at further opportunities to progress this strategy, we will only do so where such actions are accretive to earnings or are in the best interest of shareholders.”

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