Punch Taverns took a page out of the troubled financial sector’s book yesterday, announcing plans to create the equivalent of a 'bad bank' to park its worst performing assets as it revealed an interim loss of £122m.

The group, struggling with declining sales and high borrowings, said about 1,250 of its weaker leased and tenanted pubs have been hived off into a separate unit.

Giles Thorley, chief executive, said the move should enable the group to focus on turning the under-performing pubs round. However, he conceded the number of Punch managers working with the struggling publicans would be no higher than usual. 'A number of these pubs will be sold so the ratio [of managers to tenants] will continue to improve,' he explained.

Financial Times