The company took over rival Jennings last year

Wolverhampton & Dudley Breweries said providing somewhere for smokers to go would counter any impact the change in the law may have on its business.

The news came as the firm reported a 20.2% rise in pre-tax profits to �41m for the six months to 1 April.

It also hinted that it could soon be back on the acquisition trail.

The group, which has bought Burtonwood, Jennings Brothers and Celtic Inns in the past 18 months said it was "well positioned" for deals after predicting more consolidation in the pub industry.

And it said food-serving pubs with gardens would be high on its target list as landlords braced themselves for the ban on smoking in English pubs.

We are more interested in pubs where food is more important... community pubs which have outside trading areas. Ralph Findlay, Wolverhampton & Dudley chief executive Check Wolverhampton & Dudley's share price

New opening hours 'welcome'

W&D will have spent �8m on smoking zones, which also include garden areas, by the end of October and a further �12m in the year to October 2007.

In February, MPs voted to ban smoking from all pubs and private members' clubs in England, with the change expected to take effect in summer 2007.

Scotland's ban on smoking in enclosed public spaces was introduced in March.

W&D, which operates more than 2,350 pubs including the Pathfinder group, added that laws allowing pubs to extend their opening hours were "welcome" - though they were yet to have an impact on customer spending habits.

Food for thought

In the pubs it manages about 30% of its profits come from food, and it said this was likely to increase when the smoking ban was introduced.

"Food has become more and more important in our estate," chief executive Ralph Findlay said.

"In those pubs where you take smoking out it is very clear that if you have a food-based business removing smoking is not an issue.

He added: "When we acquire (more pubs) we would look at the suitability with the smoking ban in mind.

"That means we are more interested in pubs where food is more important, so that is community pubs which have outside trading areas."

The company runs breweries in Wolverhampton, Burton-on-Trent and Cockermouth, Cumbria producing ales including Marston's Pedigree, Jennings, and Mansfield Bitter.