PUBS group Punch Taverns said today it would not pay a dividend to shareholders after seeing sales fall over the year to August.
Punch – which has about 60 pubs in the Huddersfield area – stressed that its balance sheet remained strong, but said it was mindful of challenging market conditions and the need to invest in its pub estate.
The company’s leased estate, which comprises 7,560 pubs, reported a 3.4% fall in like-for-like sales for the year to August 23. The managed pub estate of 864 pubs reported a sales decline of 3.3%.
Today’s update from chief executive Giles Thornley sent Punch shares 13% lower and caused rival Enterprise Inns to fall 11% during early trading.
In June Punch was forced to reassure investors about its balance sheet after rumours it may need to reorganise its debt.
Analysts said today’s decision to axe the dividend was more likely to reflect the group’s desire to retain cash in the business.
Punch said it had provided more support to licensees through food expertise, promotions and drink discounts. The value of rent concessions also increased to £6m, representing about 3% of its rent roll.
Today’s update showed that trading stabilised in the final nine weeks of the company’s financial year, with figures little changed on the performance seen in the 44 weeks to June 21.