Trading is still proving tough at Punch Taverns. The managed and leased pub group has this morning revealed like-for-like sales at its managed pubs down 3.4%, and like-for-like profits at its leased division down 11%. Unveiling interim results for the 28 weeks to 6 March, the company said it continued to pay down debt and expected to raise a total of £300m in the current year through the sale of pubs. So far it had sold pubs worth £198m. There was no news on a replacement for outgoing chief executive Giles Thorley, who announced last month that he would step down once a successor had been found. The board said that the process to appoint a replacement was underway. The company, which has 7,100 pubs, said its managed arm had been hit by adverse weather in December and January. With a focus on stablising the performance of its 800 or so managed outlets, it had eschewed discounting with emphasis moving toward trading the business more profitably through cost efficiencies and better control over gross margins. To that end, and despite inflationary cost pressures and the return of leases following third party insolvencies, margins had improved by 0.3 percentage points. It said managed ebitda was broadly flat on a like-for-like basis. Due to the ongoing disposal programme, ebitda at its managed pubs had fallen £1m (£2m annualised) to £40m. Following the trialling of several new and improved formats the company was preparing several rollout programmes, such as taking the new Chef & Brewer concept to 50 sites by August 2010. It said capital expenditure in the managed business would total £50m this year. Punch said an “operational excellence programme” – designed to simplify ways of working, streamline pub structures and have “the right people in place doing the right things” – was starting to yield results, with employee retention rising 40 percentage points and guest advocacy up 15 percentage points. At its leased arm, which now comprises 6,300 pubs, the group said there had been no material change in like-for-like profit declines, with average ebitda down 11%. Its disposal programme had further reduced ebitda by £2m (£13m annualised) resulting in ebitda for the period of £183m. Support to licensees had been upped in the current year from £1.6m a month to £2m. So far this year the group had disposed of 524 leased pubs – 74% of which it described as “non-core” – at an average multiple of 13 times ebitda, with the proceeds going toward paying down debt. Net debt at the group now stands at £3.277bn, £188m lower than August 2009. Following the repayment of a convertible bond, all of its debt was now in the form of long term “mortgage type” finance, secured against its freehold property. Its Matthew Clark joint venture – its owns 50% in concert with Constellation Brands – delivered a post-tax contribution of £2m to the group for the period. The drinks distributor and wholesaler has annual sales of £600m and 20,000 customers. Overall, in the six months pre-tax profits fell £16m to £66m on sales down from £767.9m to £676.6m. Ebitda fell £50m to £225m. Concluding the group said: “Trading since the half year has continued in line with management’s expectations. “Trading over the Easter holiday period was good and slightly ahead of last year in the managed estate. “While we remain on track to meet our expectations for the full financial year we are mindful that market conditions remain challenging and are likely to continue to be so for the near-term.”