Punch Taverns yesterday toasted a successful year as around 1,000 new pubs helped to more than double turnover.
The Burton-on-Trent firm said revenues rocketed 101 per cent to £1.5 billion in the 12 months to August 19, sending pretax profits up 21 per cent to £250 million.
It came after Punch took the number of pubs it operates up to 9,250 with the acquisition of rival operator Spirit Group for £2.7 billion in January.
Punch sold off hundreds of unwanted pubs following the takeover as it concentrated on its best quality venues.
The company, which has more than 600 outlets in Birmingham, Coventry, the Black Country and Shropshire, said it disposed of 551 smaller under-performing pubs last year.
Group chief executive Giles Thorley said the 'churn rate' was likely to continue at a similar level in 2006-07.
"We could possibly see another 500 pubs leave the group this year - it all depends on the quality of the assets," he added.
Some analysts had suggested that Punch may sell up to 1,000 of its weaker tenanted pubs. However, Mr Thorley said while some weaker, underperforming units would be put up for sale, there was "no question" of a wholesale sell-off.
"There are a whole range of factors we look at. We're not just going to put a For Sale sign up over those units which are not performing well," he added.
The company yesterday said the new financial year had started well and that it was well prepared for the forthcoming smoking ban in England and Wales.
Mr Thorley said it was "a year of excellent progress" for the company and added: "The results for the 12 months showed strong growth and trading in the current year started well."
He said the company would benefit from its experience in Scotland, where it has 493 pubs, when the smoking ban extends to England and Wales next summer.
"Since the ban in Scotland was introduced, overall sales have been little changed, and while we remain cautious on the initial impact until a full year has elapsed, we are confident that overall quality of trading will ultimately improve," said Mr Thorley.
He added: "The introduction of outside smoking areas and better pub amenities, often including quality food, can not only negate the impact of the ban, but create new trading opportunities. The money we're investing will improve the overall quality of the estate."
Mr Thorley also said that the change in licensing laws which brought in extended opening hours "had little impact on overall trading" but reduced problems at closing time.
Punch took on 1,830 pubs when it bought Spirit in January but sold 351 by the year end in August for £690 million.
A further 38 have been sold since while the company has also transferred 155 former Spirit pubs to its leased estate and agreed a similar move for a further 175.
At the year end in August, Punch had 7,846 pubs which it leases out to be managed independently having bought 96 but sold 551. Punch also ploughed £78 million into improving 950 pubs last year.
US brokerage Merrill Lynch, which had forecast pretax profits of £238 million, yesterday reiterated its 'buy' recommendation for the shares, while Numis moved its recommendation from 'hold' to 'buy' with a target price of £13.10 a share.
Numis also tweaked its profit estimates and is now looking for pretax profits of £290 million and £340 million for 2006-07 and 2007-08 respectively.
The final dividend payment comes in at 9p, bringing the total for the year to 13.4p, a rise of 19 per cent.
Shares closed up 28.5p at 1089.5p.