The spread of smoking bans across Europe has not doused the growth of Punch Taverns, the pub operator reported full-year pre-tax profits increased by a third following a string of acquisitions during the period.

For the 52 weeks to August 20 Punch, which operates over 8,200 leased and tenanted pubs throughout the UK, said pre-tax profits increased by 28 per cent to £207m compared to the same period last year.

During the year Punch spent nearly £450m buying pub groups InnSpired and Avebury Holdings, adding 880 pubs to its estate. Excluding these acquisitions tunover rose by 2.5 per cent to £770m and organic growth at the existing estate totalled 4 per cent.

Punch is bidding for Spirit, the privately-owned pub estate of 2,000 pubs. The result of the auction which also includes Robert Tchenguiz, the property investor, and Macquarie, the Australian bank, is expected in the next few weeks.

Giles Thorley, Punch’s chief executive, said on Thursday that Punch was keen to expand.

“We are continuing to focus on supporting our retailers to build their businesses and remain well placed to acquire further quality pubs through piecemeal and innovative corporate acquisitions,” he said.

In reaction to the smoking ban to be implemented in Scotland by March 2006, Punch which operates over 8,200 leased and tenanted pubs throughout the UK group said it has taken steps to tackle a drop in pub goers. The group will build outdoor smoking areas and offer food at their pubs as part of these plans. As for operations in England and Wales, Punch said it will “address the final legislation on a pub by pub basis”.

Francis Patton, customer services director at Punch Taverns, urged the government to pursue of gradual introduction of smoking bans: “The experience of countries like Norway is that the phased approach works …I don’t think anybody is happy with the fact that there is going to be a ban.”

Earnings per share rose to 62.3p, up from 48.8p in the same period last year.

Punch proposed a final dividend of 7.6p, increasing by 26 per cent to 11.3p total dividend for the year.

Shares for Punch were trading up 4½p at 767½p on Thursday morning.

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