Tuesday, 12 April 2011

punch interims update


Punch interim results with some detail of splitting of Spirit.

Market likes this... not so much, down 5p to 74.5p.

Spirit has 798 managed and 554 leased pubs, will move all over to managed or sell them.
Rev; £379mm (331mm managed, 48mm leased), ebtida £67mm (45mm & 23mm) and OP of £49mm (27mm and 22mm).
Managed business performed strongly, revenue growth of 2%, op growth 12%, whereas leased had falls of 5% and 7% respectively.
More exposure to London and SE, thats attractive as London seems to be quite decoupled from the rest of the UK as we saw today being the only area with rising houseprices in the UK.

Punch (rev, ebitda, OP; £277mm, £137mm, £130mm) going to split into core and turnaround divisions, currently has 5,241, of which 3000 will likely be core, which make up 75% of the ebitda. average income of ~£80k, 95% on "substantive agreements". Turnarounds on ~£40k, 2,300 pubs. expect to sell them over 5yrs at a run rate of 500/yr.
sold 160 in the first half of the year, @ £40mm which had ebitda of £1.1mm.  (so average selling price is 250k, if they are turnarounds on 40k income that is 6.25x) (BR: what happens to the debt for these pubs though???)
concessions running at £2mm a month for reduced rent, have also made £17mm of capex over h1.

took a £370mm impairment charge on the carrying value of non core assets, £81mm goodwill write off, turnaround estate being valued now at £278k per pub, 8x their ebitda.

net debt £3,079mm from £3,277mm

more later....

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