Punch Taverns, one of the UK’s largest pub operators, saw its shares fall 31 per cent to 39.75p following an announcement that trading conditions remained tough.

The company saw underlying profit in its leased pubs division drop 12 per cent in 20 weeks to 10 January.

Punch released a statement on the London Stock Exchange saying: “In our preliminary results announcement on 4 November, we reported that trading conditions during September and October had remained extremely challenging and expressed our caution about trading prospects for the coming financial year.

“Despite improved trading over the peak Christmas period, trading over the period since 4 November has remained challenging with the economic outlook deteriorating for the UK consumer.”

Punch’s capital expenditure in its leased and tenanted business will be reduced from £50m to £30m. Rent concessions for struggling pubs would be increased and product discounts increased from £400,000 per month to £1.6m.

The company’s managed estate saw sales increase 1.9 per cent over Christmas compared to the same period last year, but capital expenditure is still to be reduced by £15m to £55m.

The statement continued: “While we remain confident of the longer term prospects for the company and the sector, difficult trading conditions are likely to persist for the foreseeable future and we remain extremely cautious over the near-term.”