Troubled Punch Taverns reeling as profits take 20% hit

Punch Taverns shares took a hit today as investors swilled back half-year results and found the taste not to their liking.

There have been signs of recovery in the pubs trade of late, but Punch remains burdened by a spectacular debt pile of £3.3 billion.

Efforts to cut this by flogging off hundreds of pubs have been extensive, but that debt is supported by equity of just £620 million.

Today Punch said that profits in the 28 weeks to March 6 dropped by 20% to £225 million. The stock fell 2.2p to 95.8p. Chief executive Giles Thorley has one foot out of the door — he decided to quit earlier this month — leaving the future of the business uncertain.

Peter Cawdron, chairman of Punch, said there was "no doubt that conditions remain challenging across the economy and especially in the pub sector".

Punch says it paying out £2 million a month to support struggling landlords.

Some of those landlords say that it would be better if Punch were to simply charge them less for the beer.