08:00 Wednesday 07 November 2012

Pub giant's value slashed by 99 per cent in five years

Written byROB SMYTH

A BURTON pub giant has seen an astonishing 99 per cent wiped off its value in the last five years.

Punch TavernsPunch Taverns, based on Centrum 100, posted the single biggest loss of 13 firms who have the misfortune of being part of a group dubbed the ‘90 per cent’ club.

It is an exclusive society UK companies are not in a hurry to join as it consists of those who are still part of the FTSE All Share Index but have lost more than 90 per cent of their value over the last five years.

Former FTSE-100 company Punch, which employs around 450 people at its Jubilee House base, once saw investors shelling out £9.89 a share, a five year high, before losing a whopping 99 per cent in value and dropping to a meagre 6.42 per share.

Oren Laurent, chief executive of trading firm Banc De Binary, said: “The pub industry in the UK has been devastated by the recession — it was reported earlier in the year that 12 pubs close every week in the UK.

“However, Punch Taverns has been hit the hardest as, in my opinion, they made the mistake of loading themselves with billions of debt just as their core markets started to shrink. They are now struggling to refinance this debt, I believe, meaning that a recovery looks unlikely in the shorter term.”

Other members of the 90 per cent club include current and former FTSE-100 companies RBS and Thomas Cook.

Punch competitor Enterprise Inns has also seen 88 per cent knocked off its share price since 2007.

This comes just days after the firm denied claims that it was set to default on its £2 billion debt while announcing that profits had fallen from £76 million to £64 million in the year to August 18 — a drop of £12.3 million.

The Centrum 100 based firm is in talks to restructure its £2.1 billion debt after putting its poor results down to the demerger from Spirit Pub Company last year and the wet summer.

Punch Taverns chief executive Roger Whiteside revealed that there would be a ‘slight’ reduction in headcount as part of its long term plans to stabilise the business.

It is currently trying to get its core estate of leased pubs down to 3,000 with plans to sell 1,600 over the next few years.

Punch did not want to comment on being part of the ‘90 per cent’ club when asked by the Mail.

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