Kent brewer and retailer Shepherd Neame is to spend £3m preparing its estate of 375 pubs for next year's smoke ban.
The company has already completed 25 external schemes and expects to have completed half the estate by next summer - with the rest finished by the end of 2007.
It estimates that 90% of its pubs have gardens or patios.
Chief executive Jonathan Neame said: "We aim to provide an interesting and high-quality environment for all our customers - smokers or non-smokers."
The company's smoke ban plans were unveiled as it revealed a 13.9% rise in pre-tax profit to £11.2m in the 53 weeks ending 1 July - its 31st consecutive year of growth.
Its managed house division of 49 pubs saw like-for-like sales up 4.9% with food sales rising 3.2%.
We aim to provide an interesting and high-quality environment for all our customers - smokers or non-smokers Chief executive Jonathan Neame.
The tenanted estate of 325 pubs saw total sales up 12.4%, thanks to the transfer of 15 managed pubs to tenancy.
Beer sales grew 6.1%, with own-brewed volume rising 7.2%.
The company brewed 216,000 barrels during the year.
Neame said: "The beer market continues to be under volume and margin pressure.
"However, we have maintained our ability to grow our brands and are now fully exploiting investment in distribution and production facilities.
"This has enabled us to control our cost base to counteract the impact of dramatic increases in energy and other input costs."
Neame added that a 50-70% increase in the cost of utilities was unprecedented: "Everyone's in the same boat but it's not something I've come across before."
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