Punch Taverns is trading at 9.5p, and the share price has fallen 26% since the pub operator reported a widening in its first-half loss to £174.9 million in April. In the first half of 2014 the company incurred one-off costs of £224.6 million, the majority of which were from capital restructuring. The company announced a 4% increase in its profits per pub in the first six months of the year, and stated it remains on track to deliver its full-year expectations.
In May it announced a capital restructuring plan which left shareholders with a 15% stake in the company and the remaining 85% owned by bondholders. This large equity dilution drove the share price from 14p to 10p overnight. Now that the capital restructuring has been put to be bed the company can focus on the operational side of the business.
If Punch Taverns can prove its capital structure is secure and the business is improving the stock could target 11.6p.