Another feeble British summer has taken its toll on beer sales, adding to recessionary gloom in the pubs industry, the market leader Punch Taverns said yesterday.
The group confirmed predictions of an 11 per cent drop in profits when it reports annual results in October.
Punch is still expected to make profits of around £162m this year, but conditions are "challenging". The cost of supporting its struggling lessee landlords is running at an average of £1.6m per month, more than double last year's level. And Punch's "turnaround division" – set up to focus on the most beleaguered boozers – has been forced to sell off more than a third of the original 1,250 member sites. Another 450 troubled pubs are now set to join.
The patchy sunshine has not helped. "Conditions across the quarter have inevitably reflected the varied weather conditions experienced," Punch said yesterday. "Whilst late June and early July benefited from good weather, the remainder of the summer has been unhelpful to trade, particularly the high level of rainfall seen in July."
Despite the muted outlook, Punch's shares soared 22 per cent to 130.9p yesterday on the news that the group has cut its staggering £4.5bn debt pile by more than £1bn in the last 12 months, helped by a £350m placing in July.