sell off of pubs19 Nov 2013 22:21
Interesting share this, it has the potential to go completely bust or if they can turn this around go the same way Thomas cook shares did a while ago and increase ten fold.
The negotiations with the bond holders have stalled and punch are selling pubs left right and centre. I spoke to 2 area managers in London and each have recently had 25% of their pubs they look after sold to property developers within 2 months, a lot of them at well over the book price, some of them over double the book price.
Commercial property prices are still very depressed but residential prices are storming ahead. Property development firms are snapping them up at the moment off the pubcos especially in London where luxury flats can be developed.
Its big pubs like the gunners as well that have been sold not small piddling things with small values. I can see punch surviving at a much smaller number of pubs but being more profitable. Overheads will be coming down as online ordering is pretty much compulsory, so less support staff, area managers are expecting 1 in 4 of them to be made redundant and all proceeds of these sales will be used to reduce debt.
I'm not holding stock in this at the moment but am thinking it could be the risk. I can see the debt being reduced significantly just by the sales of a large number of pubs very quickly at very good prices. The average book price of a punch pub is just £640,000 yet The kensington park pub by Ladbroke grove they just sold for 3 million. Another pub I know by Marylebone sold for 1.5 million, neither really busy just in prime property locations. Punch have plenty of pubs like that, we will see.