The firm said a strong performance from its beer division, coupled with better profits from its hotels, had helped to offset weakness elsewhere.

Underlying pre-tax profits rose 10% to �16.4m in the year to 29 March.

Job cuts by City firms hit by the global economic downturn has had a knock-on effect on Fuller's pubs in the area.

Optimism

The firm said it had managed "reassuringly good results" despite encountering some tough market conditions.

The City had been "quite a tough area to trade in" and held business back, Fuller's chief executive Michael Turner told BBC News Online.

But he remained optimistic that business in the area would return.

"When it picks up it'll be an engine for growth for the business," he said.

The firm said it had decided against cutting prices and had concentrated on food, wine and cask ale sales to boost growth.

This helped to increase profit margins at its managed pubs and bars unit, but underlying sales fell 1.7%.

Hotels

Fuller owns eight hotels and said that they had performed well despite the falls in tourist numbers because of fears over war and terrorism.

Turnover during the year to 29 March was up 31% while underlying profits were 4% higher.

Mr Turner said trading during the March to May period had "upset the applecart a bit" but said he considered the problem to be temporary rather than a long term.

Profits at Fuller's Beer Company were up 18% over the year.