Chief executive at Punch Taverns quits after nine years

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The Independent Online

The chief executive of Punch Taverns Giles Thorley surprised the market today by stepping down after nine years at the debt-laden pub group.

Mr Thorley said it was his decision to leave which will be in the middle of the summer after he has handed over to a successor from the internal and external candidates who are now at the final interview stage.

Following the announcement, Punch's closed up by 2.75p, or 3.38 per cent, to 84p on Tuesday.

Mr Thorley's tenure at Punch is likely to be remembered as a rollercoaster ride that covered it floating in 2002, acquiring the Spirit, Innspired and Pubmaster companies between 2003 and 2006, and the lethal cocktail of a credit crisis and consumer downturn that led investors to flee its over-leveraged model. He joined as executive chairman in 2001 and took the helm two years later.

Shares in Punch hit a high of £13.78 in May 2007, but since then shareholder value has been decimated, although investors in some other pub groups - notably Enterprise Inns - have also taken a beating.

Mr Thorley said: “The recession has put a big dent in the industry and it will take a long time to recover.”

Punch's net debt now stands at £3.88bn, although this is down from a high of £4.5bn.

Mr Thorley yesterday said: "I have done nine years. I have seen the business through the good times and the recession unscathed. Now, is the time to pass it on to someone else. I am 42 years old so I am still young enough to do something completely different and spend some time with my family."

Mr Thorley, who earned total pay of £681,000 in 2008/09, said he planned to retain his more than 0.5m shares in Punch. "I am a keen investor in the company," he said.

Paul Hickman, the analyst at KBC Hunt, said his tenure was associated with the "borrow and build phase at Punch Taverns". He also gave his endorsement to the two internal candidates who could potentially succeed Mr Thorley: Roger Whiteside and Mike Tye, the managing directors of Punch's two main divisions.

"I believe Mike Tye and Roger Whiteside would be capable of moving the business forward," said Mr Hickman.

For the year to 22 August 2009, Punch made a pre-tax loss of £405.7m after writing down the value of its estate by 11 per cent.