The recent heatwave across Europe added fizz to brewer Scottish & Newcastle's sales, shareholders were told yesterday.

The group, which brews Kronenbourg, John Smith's and Newcastle Brown Ale, said it was confident of hitting targets for the year thanks to thirsty drinkers across western Europe.

But the brewer, which is selling off its pubs estate, said the picture was less bright elsewhere, with a disappointing summer hitting the beer market in Finland in particular. There was also cold, wet weather in eastern Europe.

Speaking at the company's annual meeting, chairman Sir Brian Stewart said that overall trading had been positive, with improving trends in its three main businesses - the UK, France and Russia - since the start of its financial year in May.

Sir Brian said that strong demand in UK off-licences and supermarkets, boosted by the hot weather, had offset tough comparisons with last year when the Golden Jubilee and football World Cup gave sales a lift.

In France, volumes were described as very strong, while Alken-Maes lifted its performance in beer-loving Belgium.

Sir Brian also told investors that the sell-off of the group's retail estate was going to plan and was on course for completion by the end of the year.

The company announced in April that it was to offload its entire retail arm, which includes 1,450 pubs and restaurants and budget hotels, at the same time as it unveiled plans to buy cider maker Bulmer.

With some bidders already eliminated, the deadline for a second stage of the auction process passed last Friday, although it is likely to be some time before a final shortlist is drawn up.