Fuller's Inns has blamed a drop in profits in its hotels, tenanted and managed pubs division on poor results in the City of London.
While Fuller's did report a four per cent rise in normalised profits for the six months leading up to September 2003, profits in the company's pub division dropped by £0.1 million in the same period.
The company said the six per cent drop in trading in City of London sites and fall in like-for like sales was to blame.
Turnover and profit in the tenanted sector rose by six and 13 per cent respectively, while in the managed sector there was a 17 per cent rise in food turnover.
Retail director of Fuller's Simon Emeny blamed the fall in profit on lack of confidence in the City over the last two years.
He said: "It has been a difficult place to operate in over the last two years. People were worried about losing their jobs. Now, however, people are more secure, bonuses are being paid. So we are cautiously optimistic about the year ahead."
The Chiswick-based brewer announced its intention to refurbish nine of its managed sites in the second half of the financial year in an attempt to make an assault on the market from April 2004.
Mr Emeny said: "This might disrupt trading for the next six months but it is a quiet time of year. We are very excited by the possibilities from next April onwards."
Commenting on the refurbishment programme, chairman of Fuller's Anthony Fuller, said: "We continue to invest in the business, targeting areas that offer the best long-term prospects. The extensive refurbishment programme might have some impact on short-term returns but will provide a strong platform for future growth."