Solihull-based Enterprise Inns - Britain's second biggest pubs owner - yesterday said the first week of the Scottish smoking ban had not made any major impact on its business.

He is hopeful this bodes well for the clampdown in England & Wales next year.

The group said its landlords were "generally pleased" with the response from customers to the controversial new legislation.

Chief executive Ted Tuppen said: "The initial feedback we have had is that people are still going to pubs and just nipping outside for a quick smoke.

"However, it is still too early to say how the ban will impact trading over the longer-term, although the initial signs are encouraging."

The ban in Scotland came into force last Sunday and Enterprise Inns has 140 pubs north of the border out of a total estate of 8,600.

A smoking ban in England and Wales is due to be introduced by the middle of next year, but Mr Tuppen said he was "sanguine" about the legislation, which will ban smoking in all pubs, bars, private clubs and restaurants.

Mr Tuppen, who lobbied hard for an outright ban rather than the proposed partial one initially proposed by the Government, said he thought the move would be "positive" for the industry over the medium-term.

"There is bound to be some initial turbulence once the ban is introduced and some pubs will clearly struggle. But, overall, I think it will be good for the industry," he added.

He made his views known after Enterprise Inns updated investors with a trading statement for the six months to March 2005.

The group expects both operating and pretax profits for the period to be in line with market expectations, while Mr Tuppen said he was "comfortable" with current forecasts of around #330 million to #335 million for the full year to September 2005.

Last year, the group reported profits of #305.6 million.

"Our pubs have performed well, despite facing increasing cost pressures and weakening consumer spending. We have a quality estate and this is where customers are spending their money. Those pubs operating at the lower end of the market are finding the going tough," Mr Tuppen said.

He added that an increase in costs - minimum wage, gas and electricity bills are all on the rise - would be taken into account when landlords' rents came up for review.

"We're sensitive to the costs that our landlords are having to bear and will take this into account when setting a fair rent," Mr Tuppen said.

All of Enterprise Inns pubs are tenanted outlets and rents are generally linked to inflation, currently 2.3 per cent.

Mr Tuppen said Enterprise had made good progress on its #200 million share buy-back programme and hinted that the final figure could exceed this amount.

So far, the group has spent #191 million on buying back 21.1 million shares at an average price of 905 pence since the buyback was announced last November.