Insider Media Limited

Punch Taverns will “plan cautiously” for the year ahead, after profits continued to dip. In an interim statement to the Stock Exchange for the year to 21 August 2010, the Burton-upon-Trent based company announced that "like-for-like profit decline is expected to be broadly in line with the rate reported for the half year".

As expected in the company’s mid-year update, it continues to stabilise partners with financial support of £2m per month. Non-core asset sales totalling £300m have contributed to a £684m (17 per cent) reduction in net debt, bringing the net debt down to £3.1bn.

However, the company said it is now in a stronger position for the long-term, with failure rates halved, the percentage of outlets on substantive agreements increased to 86 per cent and investment in pubs improving sales.

“We expect the trading outlook in the near term to continue to be uncertain, particularly given the potential impact of the June Budget on consumer spending into next year. Against this backdrop, we believe it is sensible to plan cautiously and we have prepared our financial plans accordingly,” said the company.

“However, we are encouraged by our current trading momentum and are confident that the business change programmes and continued management actions in both sides of our estate have strengthened the business and positioned it to deliver solid longer-term operational performance.”