Fuller caution.

PUBS and brewing group Fuller, Smith & Turner has cheered an 18% rise in first-half profits but warned the rest of the year would be "significantly tougher".

The London firm posted underlying pre-tax profits of pounds 14.1m for the 26 weeks to September 26 - helped by record low interest rates, better weather and a clampdown on costs including a pay freeze.

Fuller expects a much tougher second half as VAT goes back up in January and warned the economy was "likely to remain challenging for some considerable time".

"Our first half performance has defied the recession but it has been boosted by factors that may not repeat or may even reverse," chairman Michael Turner said.

Fuller has committed pounds 40m to revamping its estate this year as well as further acquisitions as it takes advantage of lower prices.

The company has benefited from its sponsorships of high-profile sporting events such as the London Marathon and pressure on television advertising markets. Despite spending pounds 0.2m less on adverts than last year the firm secured heavy exposure around Champions League, FA Cup and England football matches.