Punch said pre-tax profits in the 52 weeks to 21 August slipped to £131m from £160m a year ago as spending cuts and tax rises reduced consumer confidence and sales, although trading improved in the final quarter of last year and the first few weeks of this year.
The group blamed the fall on people staying away from pubs due to the recession, the smoking ban and what it described as counter-productive tax and duty increases.
Punch, which said the sales dip had particularly hit its smaller drink-led pubs, said it planned to review the future of up to 1,300 of its under-performing pubs, leaving it with 4,700 core pubs.
“Whilst we remain committed to the future of the British pub, we believe fundamental change in consumer habits will result in some pubs not surviving,” the group said.
Chief executive Ian Dyson said he had launched a review of the business “with a view to exploring options to create value for our shareholders”, although he did not give further details. “While we have been encouraged by more recent trends in both the leased and managed businesses, the economic environment is very difficult and there remains room for improvement across all aspects of our business,” Dyson said.
Punch has more than 6,700 managed, leased and tenanted pubs, with the managed pubs including brands such as Chef & Brewer and Fair and Square.
Punch has been selling under-performing pubs and buying back bonds to reduce its debt, which stands at £3.1bn and resulted largely from the £2.7bn acquisition of rival Spirit Group in 2007.