Brewer S&N Year Profit up 14%, to Cut Costs

Brewer Scottish & Newcastle reported a 13.9% rise in annual profit on Tuesday and said it would cut 50 million pounds ($97.7 million) of costs in the next three years.

S&N, which tops the French market with Kronenbourg lager, Britain with Foster's and Portugal with Sagres, said it had made a pretax profit of 452 million pounds in the year to end-December on revenue of 4.155 billion.

Pretax profit was forecast between 443 million and 463 million pounds on turnover of 4 billion to 4.15 billion, according to a poll of six analysts carried out by the company.

S&N said over the next three years it would cut costs to help cope with the likelihood of slowing sales as England, Wales and France prepare to impose smoking bans in pubs.

It said it expected the English ban to reduce its U.K. pub sales by 2.5% and wipe 10 million pounds off its profits, while total U.K. pubs sales would fall by 5% as a whole.

The brewer said costs savings would be split between its U.K. and international operations. It slated a 10 million pound reduction mainly in the U.K. in the first year, with the remainder spread equally over 2008 and 2009.