BURTON pub giant Punch Taverns has revealed that plans to sell off underperforming pubs will take longer than expected.
The Centrum 100-based company revealed that it expects its pub disposal process to take two years longer than intial estimates.
The delay comes after ‘improved trading trends’ in its non-core division, with profit per pub down just five per cent compared to the previous year.
Stephen Billingham, executive chairman, explained to the Mail about why the changes were needed.
He said: “Following improved trading trends in the non-core division, Punch expects it to take longer on average before pubs become vacant and are therefore in a position to be sold.
“Accordingly, while the company has not materially altered its view in relation to the total proceeds to be received from the disposal programme, it now expects the it to take longer and for the profile of anticipated disposal proceeds to change.
“These pubs are predominantly small, wet led and have a much lower profit per pub than core pubs.
“As previously announced, given the limited scope for investment, these pubs are more likely to be impacted by the long-term decline in drinking out and as a result are expected in time to generate more value through disposal than retention.
“Guidance for total disposal proceeds for the current year remains unchanged at £100 million with approximately £25 million of proceeds anticipated from the core division.”
The firm had expected to have completed the sell off programme by the end of 2016 but this has now been changed to an estimate of 2019.
Punch also revealed that, by the end of the programme, it will have raised around £307 million by selling 1,106 pubs over several years.
This comes at a time when the firm is still in discussions over a plan to restructure its £3 billion debt pile in a bid to realign the business.
Talks regarding the complex plan are set to continue ahead of a January 14 deadline, which has been put in place for the final launch of the recovery scheme.