Scottish & Newcastle, the beer and pubs firm which brews Kronenbourg, Fosters and Baltika beers, has posted a 28% rise in pre-tax profits.

Chairman Brian Stewart said the brewing firm had put in a strong performance in challenging conditions, including poor summer weather in much of Western Europe.

Scottish & Newcastle's upbeat statement contrasts with recent gloomy news from other UK pub firms, such as JD Whetherspoon, which has warned that its annual profits could be 10% below last year's because drinkers were spending less.

Scottish & Newcastle, the UK's biggest brewer, reported pre-tax profits of �309.8m for the six months to 27 October 2002.

Soggy market conditions

The group also said it hoped eventually to raise at least �600m from selling its remaining pubs and leasing them back under a management contract.

The UK has suffered its wettest summer since the Second World War, whilst much of Europe was hit by floods.

Brewers feared the poor weather could curb summer drinking and dampen sales.

However, Scottish & Newcastle's sales were up 19% at �2.5bn.

Scottish & Newcastle owns about 1,400 pubs, and three of Europe's top 10 beer brands.

European expansion pays off

It has expanded its overseas brewing interests in the last couple of years, buying French beer brand Kronenbourg from Danone and Finnish brewer Hartwall.

It also owns Alken-Maes of Belgium.

Although operating profits from UK beer sales were level with last year, the group reported a 21% rise underlying profits from international beer sales.

Operating profits got a �74m boost from Hartwell, which Scottish & Newcastle bought in May.

Pub sales

The company said it has made "considerable progress" with plans to raise money from its pubs.

It hopes to sell the pubs outright for �600-700m, then lease them back from the buyer.

The firm said it hoped to agree a deal by December 2003.

Scottish & Newcastle's pubs include the Rat & Parrot and Chef & Brewer chains.

It sold more than 600 of its smaller, managed pubs in 2001.

In the City, Scottish & Newcastle shares closed up 14 pence at 466p.