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Scottish & Newcastle (S&N) has said that it expects to report a drop in first-half profits, blaming bad weather for hitting beer sales.

But despite the setback Britain's largest brewer said its full-year performance was likely to meet expectations.

In a trading update ahead of the publication of interim results next month, the Edinburgh-based brewer said that overall sales in the UK beer market dropped by five per cent during the first half, with poor weather accentuating the decline.

Strong trading during last year's football World Cup has also skewered year-on-year sales figures, said S&N.

In explaining the anticipated slump in profits the company also referred to "input cost pressures" experienced during the first half.

"As a result of all these factors operating profit in the UK will be lower in the first half compared with the previous year," the S&N said.

"However we believe that performance for the full year in our UK business will meet expectations," the brewer stressed.

S&N emphasised that increased investment had seen its share of the beer and cider market grow during the first five months of 2007, with key brands including John Smith's, Fosters, Kronenbourg and San Miguel all gaining market share.

The brewer said it expected beer sales to be "broadly level" during the second half, despite the impact of the new smoking ban in England.

Arrangements are also in place to deliver the first £10 million of new cost savings identified by the company during the second half of 2007.

S&N added that its joint Russian venture with Carlsberg, Baltic Beverages Holding, was performing well. Analysts say a strong performance by the unit could offset the company's poor performance in the UK.

Branded beers produced by S&N are also increasing their share of other international markets, particularly Sagres in Portugal and Newcastle Brown Ale in the United States.