Punch Taverns upbeat about 2012

PintThe Queen's Diamond Jubilee, the Olympics and the European football championships are expected to provide a boost to Punch Taverns later this year as it battles to kick-start the debt-laden business.

The group, which has some 4,800 leased pubs, recently reported that like-for-like net income in its core estate fell 2.9% in the 12 weeks to March 3, worse than the 1.5% decline in the previous quarter.
Punch, which is in the middle of a turnaround plan that involves selling its 2,000 worst performing sites, said its pubs in the south had fared better than those in the north, which has been harder hit by the economic downturn.

Its performance echoed other operators such as JD Wetherspoon that have suffered tough conditions on the high street.

But Punch remained upbeat about its prospects, saying that the Queen's Diamond Jubilee, the European football championships and the Olympic Games will boost the second half of its financial year.

As the group reports results for the 28 weeks to March 5, the City will be on the lookout for any signs of a revival in recent trading amid hope the UK's economy may be starting to pick up.

In August, Punch demerged its managed arm into a separate company, Spirit Group, which has more than 1,000 pubs including the Chef & Brewer and Fayre & Square brands focusing on the fast growing, eating-out sector of the pub market.

Meanwhile, Punch remains on track to sell 400 to 500 pubs this year after 214 disposals in its first half and has sold more than 2,000 pubs since 2008. But concerns around the long-term future of the group persist as pubs come under increasing pressure from cheap supermarket competition and the group has to keep up with repayments on its £2.3 billion debts.

Chief executive Roger Whiteside has said the group is considering plans to restructure the company's debts amid speculation that its bondholders could be asked to suffer a write off on some of the money they are owed.

The City expects pre-tax profits of £58.2 million for the year to the end of August 2012, down from £76.3 million the previous year.

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