A 29% rise in sales of the premium ale Spitfire has helped the Kentish brewer Shepherd Neame to a 12.6% rise in trading profits to £7.7m for the 12 months to June 29.

The company said yesterday, a smaller gain from property deals meant pre-tax profits were up just 2% at £8.4m after sales rose 10.5% to £78.8m. However, this still meant a 27-year record of continuous profit growth.

While total brewing volume was up 6.1%, total sales of Spitfire were 29% up by volume, with draught ale up 19 per cent and bottled ale up 68 per cent. The draught version had won listings in pubs owned by Punch Taverns and Scottish & Newcastle.

Next month Sheps begins its first television advertising campaign for the beer, still based on the Dad's Army humour of its poster campaigns.

Jonathan Neame, the company's managing director, said cask ales were effectively becoming a niche market in the UK as multinational brewers focused on international sales of lagers. That gave smaller brewers the chance to develop ale brands such as Spitfire in a market not subject to the same competitive pressure as lager.

Cash inflow from operating activities was up 16.3% to GBP15.7m

Sheps said its managed houses were performing well, with turnover up 21.4%, profits up 23% and like-for-like sales up 8.7%. On the tenanted side, the company sold 10 poorer-performing pubs and acquired seven "high quality" tenancies. Contribution to profit grew 6.4%. Cash inflow from operating activities rose 16.3% to £15.7m

The Financial Times commented that the Neame family's cautious approach to business was criticised in the days when trendy bars were sweeping all before them, "but it now looks like a case of the tortoise and the hare."