Punch Taverns last night quelled any fears that the company might have to refinance in the near term, following rumours of a parlous debt situation.
Market chatter regarding the company’s debt position had dogged the Punch share price in recent days, with the shares down by as much as 15% at one point today, before they rallied to finish the day down 5.4%, at 319.75p.
The company this afternoon brought forward its interim management statement, sweeping aside any suggestions that it would have to refinance – or that it would struggle to meet any forthcoming repayments.
Giles Thorley, chief executive, told M&C Report: “This a classic bear market problem, with a couple of analysts putting forward a story and the market reacting.”
The company said it had a clear repayment schedule on long-term debt stretching to 25 years and would not face any refinancing requirements on any of its securitised debt.
In a statement the company said: ‘The levels of headroom on financial covenants and other measures within the securitisations continue to be in line with those reported at the half year and to be in line with our expectations.
“All of our debt is secured on our extensive property portfolio comprising 7,900 freehold and long leasehold properties and 500 short leasehold properties, at effectively fixed rates of interest equating to a blended rate of interest of 6.6%, with a weighted average life of 19 years.”
The company said that despite the challenging trading conditions, it had maintained an interest cover ratio in excess of 2.0x.
It said it continued to generate strong cashflows, the majority of which came through properties within its three securitisation structures.
Cash requirements outside of those structures were “largely limited” to £14m of interest on some convertible bonds and dividend payments amounting to £42m in the current year.
