Punch investors to go without dividend

3rd September 2008, 3:20pm

Punch Taverns, the country's largest pub group has said today it will not be paying its investors a dividend after a drop in yearly sales.

This morning's news sent the share price sliding by 16% and incidentally had an effect on the shares of JD Wetherspoon, Mitchells and Butlers and Enterprise Inns.

Financial reports highlighting slow sales and the negative effect of the smoking ban are beginning to be commonplace across the sector and Punch said in a statement that it is no different: "The challenges which our industry and licensees are facing currently have been well documented. To help our licensees through this period, Punch has provided an increasing level of support through food expertise, promotional support, drinks discounts and rent concessions."

Explaining its decision to hold back dividends for investors the pub giant said: "Over the course of the year a number of considerations have led the Board to review the Group's use of the cash that it generates. In the current financing market environment, the Board considers it prudent to retain cash and further strengthen the balance sheet ahead of returning cash to shareholders through distributions."

In the leased estate, which comprises 7,560 pubs like for like sales are down 3.4% over the year to 23 August 2008. The managed estate didn't fare much better. The 864 pubs in this area saw like for like sales drop by 3.3% during the same time period.

Related Articles:

• 15 May 2009 - Corkin wine prices at Punch pubs
• 08 May 2009 - Shepherd Neame acquires 13 Punch pubs
• 26 Mar 2009 - Punch Taverns sells six of its pubs to Fuller's

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