PUBS and brewing group Scottish & Newcastle toasted its transformation into an international player yesterday as it reported a jump in annual profits.

Chairman Brian Stewart said the business had passed a critical milestone after deciding to reshape at the beginning of last year.

The group behind Newcastle Brown Ale, Foster's and John Smiths has expanded its brewing arm with the acquisitions of Kronenbourg, in France, and Hartwall in Finland.

Leisure interests such as Center Parcs and more than 1,000 pubs have been sold off to generate cash to fund the restructuring drive.

Pre-tax profits in the year to April 28 rose by three per cent to £442.3m before one-off costs, in line with estimates in the City.

Mr Stewart said S&N now had an unrivalled combination of strong brands, experienced management and operational scope. "This year has seen a transformation in the shape and character of Scottish & Newcastle."

The next phase of restructuring was likely to involve the pub estate, which includes the Chef & Brewer and Rat & Parrot chains. S&N said it was reviewing options to release capital tied up in its retail property interests.