Greene King, the acquisitive brewer and pubs company, today posted a 15 per cent fall in annual pre-tax profits to £118.5 million but said that sales in recent weeks were encouraging.

Rooney Anand, the chief executive, told reporters on a conference call that the recent warm weather and a renewed confidence among drinkers and diners had boosted sales.

However, he said that worries about the prospects for unemployment - and political uncertainty, particularly the MPs expenses row - was casting a cloud over the outlook in the short term.

"The fact that people have a bit more money in their back pocket ... has been beneficial, but we are still cautious," Mr Rooney said.

The Suffolk-based company, which brews Abbot Ale and Old Speckled Hen, said that underlying sales in the first eight weeks of its new year were up 5.2 per cent in its Greene King Retail division and 10.2 per cent higher in Belhaven, its Scottish brewer.

Underlying sales for the year to May 3 rose 1.7 per cent, pushing revenues up 1.3 per cent to £954.6 million.

Shares rose more than 3.5 per cent, up 14.7p to 425p in early deals.

Greene King, which owns 1,600 pubs and leases and manages a further 900, said in April it would make no less than £115 million in annual profits this year. It launched a £207.5 million rights issue to fund future acquisitions.

The group, whose chief executive is Rooney Anand, has since been making opportunistic pub acquisitions and been buying back its bonds.

Greene King said today that, since April, it had bought 11 new pubs from Punch Taverns, its debt-laden rival, for £30.4 million and paid back £22.4 million of its debt.

Mr Anand said future acquisitions remained likely. "We are seeing assets being offered to us that we would not have been offered in recent months," he said.

Greene King has a £4 billion debt burden that it has been grappling to pay off. It edged the annual dividend up to 15.1p.

"Trading generally improved from December, although cost pressures remain and both economic and political uncertainty are affecting consumer confidence," Mr Anand said.

Earlier this month, Greene King launched a nationwide competition, "Brew us a Flavour", for a member of the public to create a new beer that it will brew.

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