It follows “improved trading trends” in the non-core division, with average profit per pub being down just 5% on the previous year.
Disposal programme
“The company expects it to take longer on average before non-core pubs become vacant and are therefore in a position to be sold. Accordingly, whilst the company has not materially altered its view in relation to the total proceeds to be received from the non-core disposal programme, it now expects the disposal programme to take longer and for the profile of anticipated disposal proceeds to change from the profile previously announced.”
Punch had expected to complete the majority of its disposal programme by 2016. In its updated guidance, the company expects disposal proceeds to continue at a declining value each year until FY2018, when it will total between £20m and £30m.
Total disposals from FY19 onwards will total between £60m and £70m, Punch said. Expected disposal proceeds for the current year remain unchanged at c£100m, with c£25m of proceeds anticipated from the core division.
Overall Punch hopes to raise £307m disposing of 1,106 non-core pubs.
'Limited scope for investment'
“These pubs are predominantly small, wet led and have a much lower profit per pub (at c£29,000) 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.”
It’s understood that the announcement is not connected with ongoing discussions about Punch’s debt restructuring.