BREWING giant Daniel Thwaites has recorded an increase in profits despite seeing a fall in day-to- day business.

The East Lancashire firm, which employs 340 staff and has 425 pubs, saw pre-tax profits in the last 12 months rise 9.5 per cent to £12.7million despite operating profits being down £400,000 on last year.

But Thwaites said new cask ales such as Double Century - launched to mark its 200th anniversary - and its flagship Lancaster Bomber, helped the firm buck the national trend to record a third successive year of growth in the beer market.

After tax, the company made £9.1million, £200,000 more than last year.

The figures released to the Stock Exchange for the 12 months ending March 31 saw turnover fall from £164.5million to £162.7million.

The Blackburn-based company recorded a profit partly due to reduced administrative costs, lower interest payments after paying back some debt and saving nearly £1million in pension liability payments after topping up its pension fund.

In the last 12 months it has also sold 12 pubs and the Oaks Hotel, in Reedley, for a total of £5.4million.

Brian Hickman, managing director, said the company would continue its investment programme to improve its pubs and its brands as well as buying new premises.

He said: "It is fantastic to see our biggest investment areas producing real success. We have spent over £3.5 million across two years on investment programmes at our pubs ahead of the smoking ban, and we have also made 10 significant acquisitions, recently adding flagship sites such as the Listers Arms in Yorkshire - one of our targeted development areas.

"The on-trade beer market has been continuing to decline by around four per cent per annum, but we have managed to buck that trend due to investment in product innovation."