UPDATE 2-Punch writes down value of estate as profits fall

* FY pretax profit 160 mln stg vs consensus 161.5 mln

* Reduces debt by over 1 bln stg during year to 3.47 bln

* Sees Competition Commission referral as unlikely

* Expects further 200 mln stg disposals this year

* Shares down as much as 11 pct

(Adds CEO, analyst comment, shares, background)

By Matt Scuffham

LONDON, Oct 14 (Reuters) - Debt-laden British pubs firm Punch Taverns (PUB.L) wrote down the value of its estate by 663 million pounds ($1.1 billion) and reported a 39 percent drop in full-year pretax profit, sending its shares lower on Wednesday.

Punch, the second-biggest leased and managed pubs operator in Britain, said it had taken an impairment charge on the value of pubs it considered unlikely to generate long-term sustainable growth and where profitability had been significantly impacted by the current market conditions.

Following the write-down, Punch said the value of its pub assets and investments had been revised to 5.4 billion pounds, equivalent to a net asset value of 260 pence per share.

Britain's pubs have faced torrid trading conditions over the last two years as a smoking ban, recession, above-inflation tax rises and cheap booze offers in supermarkets kept drinkers at home, leading to over 50 closures a week. [ID:nLL565099]

Punch, which has over 7,600 pubs across Britain, said pretax profit for the year to Aug. 22 fell to 160 million pounds ($255.6 million) compared with 262 million the year before.

Market forecasts for underlying pretax profit ranged between 144 and 170 million pounds, with the consensus at 161.5 million, according to a Thomson Reuters I/B/E/S poll of 17 analysts.

Punch said it reduced net debt by over 1 billion pounds ($1.60 billion) to 3.47 billion over its last financial year, easing concerns over its long-term future.

It has embarked on a programme of selling underperforming pubs and buying back bonds in order to reduce its borrowings. It also raised 375 million pounds through a share issue and suspended dividend payments. [ID:nLF308029]

"Punch's debt reduction has been impressive," said Astaire Securities analyst Mark Brumby. "The group is pulling the correct levers but faces an uncertain future."

On a conference call with reporters, Chief Executive Giles Thorley said the group had raised 414 million pounds through disposals last year and anticipates raising another 200 million in the current year.

"We've been pretty effective on disposals selling over 800 this year. We are expecting it to be slightly less next year."

Thorley also said assistance to struggling tenants, which is given through rent concessions and product discounts, was currently running at a level a "little higher" than the 1.5 to 1.6 million pounds seen over the last financial year.

Around 1,000 tenants are currently receiving help, he added.

Punch rival Enterprise Inns (ETI.L) said in September the rate of closures across its estate had slowed and fewer tenants were needing financial support. [ID:nLT481874]

Britain's Office of Fair Trading will decide next week whether to refer to the Competition Commission controversial tie-in arrangements which force pub tenants to take beer supplies only from their landlords.

Thorley said he felt a referral was unlikely.

Shares in Punch Taverns, which have lost over 80 percent of their value in the last eighteen months, were down 10 percent to 104.5 pence at 0850 GMT, having earlier been 11 percent lower. ($1=.6259 Pound) (Editing by Paul Sandle and Simon Jessop)