Brewer and pub operator Young & Co reported a "pleasing" underlying performance in the half-year to 25 September, despite poor summer weather.
The group boosted turnover by 5.5% to £60.9m in the 26 weeks, but pre-tax profit fell by
4.3% to £4.8m.
However, excluding £400,000 of costs from the review of the Ram Brewery site and other exceptional items, profit before tax increased by 5.3% to £5.1m.
"The improvement in underlying performance is particularly pleasing against the background of additional regulatory burdens, wage costs, and the strong trading comparatives driven by last summer's excellent weather," said chairman John Young.
The group ended the year with 110 pubs with a total of 372 letting bedrooms after selling four managed pubs and buying two managed and two leased sites. Since September, it has added two managed and one tenanted pub to the estate.
The managed pub and inn division increased turnover by 6% and profits by 4.4%, with like-for-like rises of 1.5% and 4.6% respectively.
Profits at Young's inns soared by 20.9% thanks to developments at the Crown in Chertsey, Surrey, and City Gate in Exeter.
Despite a marginal increase in occupancy, which rose by 0.5 percentage points to 64.9%, intense competition lowered revenue per available room by 1.9% to £38.15.
During the interim period, Young's invested £5.8m in its pubs, with the lion's share of £3.8m going to the managed estate.
The board elected to increase the dividend paid to shareholders by 5.1% to 11.40p.
by Angela Frewin
Buy this week's Caterer magazine for more industry news and analysis