Scottish & Newcastle reported brisk trade in its UK and Baltic businesses but overall results for the six months to 30 June were held back by a disappointing performance in France. The brewer reported a 3.4% increase in revenue for the first half of 2005, at £1.88bn and a 4% rise in operating profit for the period, to £206m. Profit before tax rose 8.7% to £163m and earnings per share were up 9.9% to 13.3p. In the UK, operating profit grew 11% to £70m thanks to growing market share. The Baltic Beverages Holdings joint venture with Carlsberg posted a 32% hike in operating profit to £49m, led by volume increases in Russia and Kazakhstan. However, branded beer market volumes in France fell 4.2%, due to a weak economy, continued growth of hard discounters and high promotional spend by key competitors. Sir Brian Stewart, the chairman of S&N, said sales in France should soon be improved by impending changes to the law, which will enable retailers to price leading brands more competitively and so fight back against the currently advantageous position held by hard discounters and private labels. The company said it was confident that it would meet targets for the full year, despite the situation in Western Europe remaining "challenging". It said the UK business expected to benefit from cost savings and that there is "continued optimism" for BBH’s markets and brands.