PUB group Punch Taverns said yesterday that its £1.2bn acquisition of Pubmaster, based in Hartlepool, had led to a profits boost of nearly 40 per cent.

The UK's second-largest pub company increased its sites in the North-East from 120 to 481 when it bought Pubmaster at the end of last year.

The acquisition saw the number of pubs across the UK owned by the company rise by more than 3,000.

Announcing its end of year results yesterday, Punch said the purchase of the Pubmaster had contributed to excellent pre-tax profits of £156m, up more than £40m on the previous year.

Northern operations director Andrew Thompson said: "Pubmaster was a significant acquisition for us and it has fitted in very well to our own estate.

"The new business has made a big impact on the group, as these figures show."

In the past two years, the group had nearly doubled the size of its estate using cash resources and debt.

The group, whose acquisition of Innspired after the end of the financial year added another 1,064 pubs to the group, said the results demonstrated a continuation of the trading momentum in the first half.

Chief executive Giles Thorley said the company was continuing to see stable market conditions, with encouraging trading and record numbers of applicants to run its pubs.

''We see good opportunities for further acquisitions and property-based transactions to further enhance shareholder value," he said.

Punch said organic growth had played a part, with average earnings per pub in the group's estate rising.

Mr Thompson said the group was planning to expand