Punch Taverns this morning revealed that like-for-like sales at its managed division were down by 2% for the year – however it said it was “encouraged” by recent trading which had seen a 2.6% rise in the past 12 weeks. In a pre-close statement for the 52 weeks to 21 August 2010 it said that: “The continuing delivery of our operational excellence programme and increased investment in the estate through the trial and rollout of new pub concepts have contributed to the recent positive trading momentum.” Trading at Punch Partnerships, the company’s leased and tenanted arm, was consistent with that outlined at its interims but it added that its pathway to partnership programme had “started to deliver operational improvements”. In a statement Punch said: “We expect the trading outlook in the near term to continue to be uncertain, particularly given the potential impact of the June budget on consumer spending into next year. Against this backdrop, we believe it is sensible to plan cautiously and we have prepared our financial plans accordingly. “However, we are encouraged by our current trading momentum and are confident that the business change programmes and continued management actions in both sides of our estate have strengthened the business and positioned it to deliver solid longer-term operational performance.” Commenting on its leased and tenanted pubs the group argued its estate had been strengthened through the percentage of pubs on substantive agreements being increased to 86%, failure rates being halved and continued financial support of just under £2m per month. But it warned profits faced pressures from declining drinks margins and reduced rental income from returned pubs. The group said: “Consequently, although improved sales volumes have been delivered over the final quarter, like-for-like profit decline is expected to be broadly in line with the rate reported for the half year.” On the managed side it had invested in 200 outlets in the trading period. The company’s strategy of the disposal of non-core assets had generated proceeds of £300m at an average multiple of 16 times EBITDA, added Punch. It reduced gross debt by £684m and net debt at the year-end for Punch stood at £3.1bn. As at 21 August 2010, Punch said it had £183m of free cash and £114m of bonds (at nominal value) held at the group level. It said: “These resources have been, and will be available to protect the group's debt structures against default by underpinning the net asset value of the group for our shareholders.”