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

By Burton Mail  |  Posted: November 07, 2012

Comments (9)

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

Punch 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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  • Burton Mail  |  November 11 2012, 5:29PM

    Only an idiot would think that the smoking ban has had any negative impact on the pub trade. On the contrary - it's great to walk into a pub with friends for a pint (quiet or otherwise) and not have to endure other people's stink. No, pubs have suffered because the price of beer has risen to the point where it's now an occasional treat, as opposed to a regular social custom, for most working people.

  • Burton Mail  |  November 08 2012, 2:43PM

    To those who claim the smoking ban caused Punch's demise - what tosh! There are plenty of successful pub chains who are managing quite well. It's all about giving the punters what they want - simples!

  • Burton Mail  |  November 08 2012, 2:11PM

    If the article went back to 2006 you would see that the share price was c.£14 per share, so the fall even more dramatic than portayed.

  • Burton Mail  |  November 08 2012, 9:00AM

    Their Policies on Rents & Beer choice haven't helped either. Many of their Pubs are of the "Flat Cap & Whippet veriety & will if left alone produce an unexciting steady income.

  • Burton Mail  |  November 07 2012, 7:58PM

    Perhaps Punch Taverns might realise how hard pressed their tenants are now and the reason why so many pubs have gone to the wall in recent years. The recession hasn't helped and neither has the smoking ban. It will be awake up call to the industry in general.

  • Burton Mail  |  November 07 2012, 1:08PM

    Odd. Punch welcomed the "Opportunity" afforded by the UK smoking ban several years ago. What happened? Hmm... this graph shows just how well the ban worked out for them: http://tinyurl.com/PunchGraph Pretty much par for the course with the antismoking campaign, eh? - MJM

  • Burton Mail  |  November 07 2012, 11:31AM

    'Pub giant's value slashed by 99 per cent in five years'. What happened five years ago? The smoking ban, which is killing our pubs.

  • Burton Mail  |  November 07 2012, 10:31AM

    The level of debt is totally unacceptable in these very difficult times ! Should they default the banks will lose and in the end may mean a bail out at the banks concerned which will seriously delay the sale of the banks back into the private sector

  • Burton Mail  |  November 07 2012, 10:19AM

    As the report stated this was all down to bad management decisions loading the company with too much dept - In comparison London pub chain is going from strength to strength under their management