Shares hit by Punch plans to sell 1,300 pubs

Punch Taverns, Britain's biggest pubs group, yesterday announced plans to dispose of 1,300 outlets to reduce its debt and focus on a core portfolio.

The group, which owns or manages nearly 400 pubs in Scotland, said it wanted to reduce its current holding of 4,700 pubs and would sell ones where it believed "long-term viability is compromised" by the year end.

It has already disposed of more than 890 pubs in the financial year to the end of August.

"Whilst we remain committed to the future of the British pub, we believe that fundamental change in consumer habits will result in some pubs not surviving," said the company.

Punch reported bottom-line losses of 160 million during the year due to a 218m write-down on the value of its non-core pubs. Net debt fell by 322m to 3.14 billion.

The final quarter of the period showed an improved trading performance, a trend which the company said has continued into the first seven weeks of the new financial year.

However, new chief executive Ian Dyson, who joined last month, said the group would continue to take a "cautious" view of trading prospects. Shares in Punch closed down 11 per cent at 80.05p.