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UK pub and brewer, Greene King, revealed that the recent trading environment was "more challenging" over the festive period today.

The brewer of Abbot Ale and Old Speckled Hen said the smoking ban and decreased consumer confidence kept Britons out of pubs and warned of a slow year ahead.

Despite the warnings, Greene King, which runs about 2,200 pubs in England and Scotland, said that it was confident in meeting analysts' expectations.

"Group margins remain ahead of last year despite the well-documented cost pressure being faced by the industry as a whole," the company said in an announcement.

The interim statement, which covered the 38 weeks to January 20th 2008, said managed pub like-for-like sales picked off 0.1 per cent, in line with last year.

Restaurant chain Loch Fyne, acquired by the Suffolk-based brewer last August, had a strong holiday season, with sales increasing by 2.3 per cent according to the update.

With two years of the smoking ban north of the border already, sales of Belhaven Best in Scotland rose 5.6 per cent.

Competitors, such as Punch Taverns and Enterprise Inns have blamed the smoking ban for dragging down sales.

"The Christmas and New Year period showed improved trading over previous weeks, but whilst peak days showed growth year on year, trading on other days was more subdued," Greene King said in the brief statement.

It added that profits were expected at £144 million when it announces full-year results in May.

The brewer, initially started in 1799, has seen its share price jump up 3.15 per cent to 769p in early trading. Shares reached highs of 875p last November but dropped 6.8 per cent this year.