THE UK’s biggest pubs group today plunged to annual losses of £176 million after slashing £663 million from the value of its estate.
Punch Taverns, which has more than 7,600 leased and tenanted pubs, cut the value of its estate to £5.4 billion following the impact of recession and falling property prices.
Today’s bottom-line losses for the year to August 22 are bigger than the £64.7 million reverse seen last year.
The group said it remained cautious due to a "lack of visibility" over trading as underlying profits - which exclude the impact of write-downs - fell 39% to £161 million.
Chief executive Giles Thorley warned: "The continuing challenging market in which we operate makes forecasting difficult."
Despite the huge losses, Punch has 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.
Punch said current trading was in line with management expectations but results have been hit by a combination of weaker beer sales, lower rental income and higher levels of support to its struggling licensees - running at around £1.6 million a month throughout the year.
The Staffordshire-based group also pleaded with the Government to protect the industry after recent blows such as alcohol duty hikes last year.
It said: "The pub industry has been at the receiving end of punitive tax increases and burgeoning red tape for too long and it needs positive action from the Government and industry to improve its future."
Punch is currently awaiting the results of the latest competition inquiry into the "beer-tie" model which forces tenants to buy beer from pub company owners. Its follows a ’super-complaint’ to the Office of Fair Trading by real ale campaigner CAMRA in July.
"Whilst we do not believe that it is necessary for the sector to be investigated by the competition authorities again, we continue to cooperate with the OFT and await the outcome of their review," the firm added.