Midland pub chain Punch Taverns has revealed it is now providing £2 million a month to help licensees battle continued tough trading conditions.
The UK’s biggest pubs group said the support, which is in the form of rent concessions and special discount schemes, has increased from the average of £1.6 million a month seen during the year to August.
The Burton-on-Trent-based company said the support was paying off as the number of pub returns from licensees is materially down on the previous year while the level of closed properties and those available for let has also fallen.
Despite its actions to stabilise the pub estate, Punch said profits remained under pressure due to lower beer volumes and weaker rental income.
It warned that like-for-like profits in the 16 weeks to December 12 showed a similar decline to the last financial year, when the figure fell 11 per cent.
Punch, which has more than 7,600 leased and tenanted pubs, including hundreds in the West Midlands, plunged to annual losses of £405.7 million in the year to August after slashing £663 million from the value of its estate.
Despite the huge losses, Punch strengthened its balance sheet by cutting its debt pile by more than £1 billion to £3.5 billion during the year.
Its self-help measures included a £375 million fundraising with shareholders in order to prevent it being forced into disposing of core parts of its pub estate.
The company’s ongoing pub divestment programme saw it dispose of 352 sites in the first 16 weeks of the financial year, realising proceeds of £127 million.
In a trading update, it added: “Trading into this financial year has as expected remained difficult, and the challenging economic environment and our smaller pub estate will affect profitability in the short term.”
The “beer-tie model”, which forces tenants to buy beer from pub company owners, was recently cleared by the Office of Fair Trading, following a ‘super-complaint’ by real ale campaigner CAMRA in July.
Punch said today it had made improvements to “cement our commitment to build more honest and transparent partnerships” with licensees.
It has relaunched its recruitment website to indicate expected earnings and hosted its first forum to source direct feedback from licensees.