Punch Taverns' shares slide as pubco denies letting issue

Shares in Punch Taverns continued to slide today after weekend press reports suggested a fifth of the pubco's outlets were awaiting tenants.

After Punch's shares fell 10 per cent this morning at 146p they fell a further eight perc ent to 132p. As well as being swayed the reports, investors took flight from the stock over debt worries. Last month research from City brokers Morgan Stanley argued that the leased pub model was "being sorely tested".

However Punch chief executive Giles Thorley was quoted in the Sunday Times​ press coverage saying there was no deterioration in the group's lettings situation and he rebuffed fears over the group's debt position.

He said the pubco leased more than 800 pubs in the year to August, with 100 being leased in that month alone.

Thorley also rejected claims the group would have problems finding the resources to pay off a convertible bond worth nearly £300m in two years' time.

The latest fall in Punch's share price follows a six per cent slump last Friday. The FTSE100, the stock exchange's index of the top 100 listed companies in the UK, was itself down by more than three per cent today.

Despite Thorley's reassurances concerning the group's financial situation, the market is currently nervous about companies with large debts whose commercial exposure is the consumer.

Other listed pub stocks felt the brunt of market nerves today, with Enterprise Inns down more than nine per cent at 159.5p, JD Wetherspoon down four per cent at 244.75p and Marston's down nearly seven per cent at 157.25p.