Leicestershire brewer and retailer Everards has increased profit by almost a third last year, despite the smoking ban and a drop in sales.
The company made a pre-tax profit of £4.58m in the year to the end of September 2007 - compared with £3.46m in the previous year.
Turnover dropped 17% to £34.87m over the same period. The decline in sales was linked to the disposal of its wholesale business.
Profits would have been lower had it not made the move. Newman said profits from its core business had increased by 16.5%, but he expected 2008 to be a tougher year.
Absorbing duty increase
Everards is to absorb some of last month's duty increases rather than pass them on to tenants.
The move has been made because tenants have faced a "tough autumn and winter trading period".
Everards managing director Stephen Gould (pictured) said the company had decided to limit the increase in the cost of its own beers to 2%.
Tough year ahead
Finance director Mark Newman said he expected 2008 to be a tougher year.
"We have got the smoking ban together with the general uncertainty in the economy," he told the Leicester Mercury.
"We think that this year will be quite a difficult year and we wouldn't expect the profits to be as favourable."
He added: "We have taken this decision for much wider reasons than the Chancellor's Budget announcement, unwelcome as that was.
"It has clearly been a very tough autumn and winter trading period for all licensees and we know that our licensees are experiencing above-inflation price increases for raw materials (such as food) and with utilities."