From the Wall St Times
Beer consumption in UK pubs was down 9.9% in December 2008, according to the British Beer and Pub Association, and UK pubs sell 6.7 million fewer pints per day than they did 10 years ago.
As cash flow from their UK pubs has dwindled, the debt accumulated by pubcos Punch Taverns and Enterprise Inns has become problematic. These days, the UK pub companies are relying largely on proceeds from pub sales to pay down billions in debt.
Though the two UK pub companies' shares have risen slightly in recent weeks, their stocks are still down sharply from a year ago, Punch's by 82% and Enterprise's by 69%.
Punch Taverns and Enterprise Inns have £4.5 billion and £3.7 billion in debt, respectively. Both UK pub companies aim to sell more than 200 pubs this year, significantly more than analysts had expected last fall.
The UK pub companies will continue to shed a similar number next year, the analysts believe, though that will hinge on how much cash they receive from the sales.
The pub sales come amid general alarm in Britain about pub closures. In recent weeks, the UK pub industry has frequently cited a statistic indicating that 39 pubs are closing a week as the recession picks up steam. About half of those closings involve pubs that are independently run, while 40% or so come from pub aggregators such as Punch Taverns and Enterprise Inns.
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