* Comparable profit at leased pubs down 12 percent
* Double-digit decline in beer sales
* Increased support to pub landlords, to cut capex
* To exceed target of 50 million pounds from pub disposals
* Stock down over 30 percent
(Adds new shares, Numis downgrade, details of debt interest)
By Matt Scuffham
LONDON, Jan 14 (Reuters) - Punch Taverns, Britain's biggest and most indebted pub operator, reported a sharp fall in profit at its leased pubs and said it was ramping up support for struggling tenants, sending its shares down over 30 percent.
Punch, which has over 8,000 pubs in total, said in a trading statement that underlying profit at its 7,300 leased pubs fell 12 percent in the 20 weeks to Jan. 10 in "very challenging" trading conditions.
The percentage fall in beer sales volumes for the period was in double-digits, the company said on Wednesday.
The group's managed pubs division fared better with like-for-like sales down only 2.5 percent after benefiting from an improved performance over Christmas and New Year, when sales rose 1.9 percent versus a year earlier.
Punch said it was increasing assistance to struggling pub landlords by investing 1.6 million pounds ($2.34 million) per month in its tenant support programme through rent concessions and product discounts.
Chief executive Giles Thorley said about 1,200 of the group's 7,300 leased pubs were receiving assistance and total assistance in 2008-09 was projected to be 21 million pounds.
At 1500 GMT, shares in Punch were down 31 percent at 39.75 pence, having earlier fallen as low as 38.5 pence. Enterprise Inns, Britain's second-biggest pubs group, fell 22 percent to 47.75 pence, while Greene King, which has a sizeable tenanted estate, dropped 7 percent to 425 pence.
"After a bounce in sector share prices, we expect this to act as a reality check for the sector, with tenanted operators being most affected," Citigroup analyst Richard Taylor said.
Numis analyst Douglas Jack said he expected current sales trends to continue through 2009 and downgraded earnings forecasts for the stock by 28 percent. He now predicts Punch will make a pretax profit of 160 million pounds in 2009, compared with his previous expectation of 228 million.
DEBT PILE
Evolution Securities analyst Nigel Parson described Punch's performance as a "shocker" and said the situation was likely to get worse.
Parson said Punch's ability to respond to a sharp economic downturn and to a smoking ban widely blamed for hurting business was "hampered by its enormous and inflexible debt burden".
"We are not convinced it can meet its 2010 debt repayment obligations. If it survives, Punch faces years of painful restructuring, deleveraging and sub-inflation growth," he said.
However, Punch said it expected to meet conditions within its Punch A and Punch B debt securitisations this year.
Punch's net debt currently stands at just over 4.3 billion pounds, compared with the group's equity value of 154 million pounds as at close of trade Tuesday.
The group paid more than 300 million pounds on interest costs associated with its debt facilities during its 2008 financial year.
Thorley said Punch had taken action to reduce debt and increase free cash flow. "We're on top of the case. We're acutely aware that that's the priority," he said.
One measure being taken is the disposal of 500 pubs, announced last November. Existing tenants are being given first refusal and Thorley said there was strong interest.
Punch has already sold or exchanged contracts on 30 million pounds worth of pubs and Thorley said proceeds from disposals were on track to exceed the original target of 50 million.
Punch is also cutting back on capital expenditure over the coming year. For the leased estate, the group expects it will be 30 million pounds, down 20 million on previous guidance. For the managed estate, it anticipates it will be 55 million pounds, down 15 million on the previous guidance.
($1 = 0.6841 pound)
(Editing by Simon Jessop)