Paul Hickman, analyst at KBC Peel Hunt

The effect of the smoking ban has differed widely depending on whether you are in the industry or an investor. The pubcos took radical action

in advance.

Assessing risk on a house-by-house basis, they disposed of thousands of pubs, and transferred others from management to tenancy.

Enterprise Inns, for example, sold 769 pubs in September 2006, and Punch sold 869 pubs in May 2007. The Scottish ban proved an effective dry run. Greene King acquired Belhaven back in 2005 while its share price was depressed ahead of the ban. And Wetherspoon used Scotland as a test bed for its enhanced food act, before resuming expansion in England.

In practice, we think that, over the winter, the ban hit pubco sales by an average of around 3%, although clearly there is immense variation around

any average.

Profits for a time were down by 10% or more, as even where wet and machine sales were replaced by food, this was at a much lower net margin.

Smoking solutions were ineffective in the winter, so that only pubs with major food or some other independent attraction were unaffected.