Punch Taverns, the embattled pub company, sought to reassure investors over its financial position today, despite remaining cautious over the trading outlook for the coming year.

Reporting a 7.1 per cent fall in full-year pre-tax profits to £262 million, in line with expectations, Giles Thorley, chief executive, said: “Despite rumours of our demise, we are still alive. It’s business as usual.”

Mr Thorley, who has been forced to watch the group’s share price fall by 80 per cent over the past 12 months, said that one of the biggest problems had been halting the negative sentiment, much of it exacerbated by short-sellers.

“The market perception has been the biggest issue,” he said. “It’s not the nicest time to be running a public company at the moment. You do feel the weight of expectations, especially negative ones.”

Mr Thorley, who in September scrapped the final dividend to preserve its cash resources, said that the company had been able to take advantage of the market turmoil to buy back some of its debt at very low levels, and he was confident it would be able to repay the £275 million of convertible bonds by the due date of December 2010.

Reiterating his belief in Punch’s financial strength, he said: “In three, four or five years’ time the business will still be here and the debt will be lower.”

Asked whether he had considered resigning during the turmoil of the last few months, he replied: “I love the business and the industry and whenever I’ve been slightly pessimistic, I’ve looked around the market place and thought about what other businesses I’d like to run.

“But, to be honest, it’s hard to see any company that is doing well in the current conditions.”

Punch today reported a fall in pre-tax profits from £282 million to £262 million, partly due to disposals, with basic earnings per share down from 84.4p to 80.2p.

The figures exclude exceptional losses of £342.5 million, mostly because of writedowns on the value of its pubs to reflect the downturn in trading, although there was also a £31.1 million hit from a reduction in value on interest rate swaps.

There was an impairment loss of £139.9 million against the value of its managed pub estate and £154.8 million against its leased estate. The leased losses were largely taken against 491 pubs that were “considered unlikely to generate long-term sustainable growth” and these would be sold “within the next few years”.

But Mr Thorley said that, despite the writedowns, its 8,424 pubs — 7,560 of them leased — were still worth £6.5 billion, some £2 billion above the net debt of £4.5 billion.

Like-for-like contribution from its leased estate fell by 3.4 per cent during the year to August 23, while like-for-like sales in its managed pubs fell by 3.3 per cent.

In the fourth quarter, there was a slight deterioration in its leased pubs to just over 4 per cent, although the managed division saw an improvement to 2.2 per cent. Mr Thorley said trading since the year-end had followed a similar pattern, remaining "extremely challenging".

The company has forked out £14 million in aid to distressed pub tenants suffering from a combination of the smoking ban, consumer spending weakness and soaring costs. Some £6 million was in rent concessions.

Like-for-like rental growth fell from 4.2 per cent to 2.1 per cent, and Punch claimed that average licensee profitability had remained in line with that of last year.

Mr Thorley said that the company had "significant headroom" against its debt covenants and would continue to use any spare cash to pay down debt.

Asked whether there was any prospect of the restoration of dividend payments, he said: “We’re not going to do anything on that in the shorter term. Buying back debt in the market gets better returns. We’re more likely to do share buybacks first. But it’s not for ever.”

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