Punch Taverns, Britain’s largest pub and bar operator, has reported a 20 per cent drop in profits for the half-year to 5 March to £33m. Pre-tax profits were £61m, a year-on-year decline of £5m. 

During the 28-week period, Punch, which has around 4,800 leased pubs, invested £12m in 130 core venues and sold 214 pubs. The company is in the middle of a turnaround plan involving selling off its 2,000 worst-performing sites; as many as 500 are expected to be off-loaded this financial year.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) for the period was £128.3m (2011: £156.7), while revenue was £264.6m (2011: £324.8m).

Like-for-like sales at Punch pubs, meanwhile, rose by 4.9 per cent over the full period and by an impressive 8.2 per cent in the second half.

Net underlying finance costs were down 2 per cent at £87m, reflecting a decrease in borrowings. The group’s average cost of funding was 6.9 per cent (2011: 6.8 per cent).

Roger Whiteside, CEO of Punch Taverns, said: “Despite weaker consumer market conditions in recent months, our teams have worked hard to contain costs and deliver profits in line with our expectations for the first half and we remain on track to meet our full year profit expectations.”