Brewer withstands tough climate

Pubs say they will have to fight hard to get people through their doors

Brewer and pub owner Greene King has reported a rise in annual profits despite facing what it said was an "unprecedented set of challenges".

Pre-tax post-exceptional profits rose 1% to �147.9m in the year to 4 May, as sales increased 5% to �960.5m.

Green King said it had to withstand the impact of the smoking ban in England, pressure on consumer spending and rising energy and transport costs.

It warned that economic conditions would not "improve" in the short term.

Greene King shares rose nearly 3% in early trading after the results were published.

'Exceptional performance'

Following the sale of Scottish & Newcastle earlier this year, Greene King has become the UK's largest listed brewer.

It runs about 800 managed pubs and restaurants as well as 1,440 tenanted and leased outlets.

The economy is not likely to improve in the short term Rooney Anand, Greene King chief executive See Greene King shares

Sales at managed pubs rose 4% in the past year which Greene King put down to strong demand for food and "premium drinks".

However, sales at leased and tenanted pubs were flat, and the firm warned that beer sales were likely to be under "considerable pressure" due to the general economic uncertainty.

Greene King said it was too early to gauge the full impact of the smoking ban in England.

But it noted that it was "encouraging" that its Scottish business, where the ban was implemented earlier, had performed strongly over the period.

"This year saw an unprecedented set of challenges for the industry but I am pleased to report exceptional performance across the business," said chief executive Rooney Anand.

But he added: "The economy is not likely to improve in the short term and we are not immune to the difficulties this presents for our market."

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