Greene King, which operates the Hungry Horse, Old English Inns, Eating Inn and Loch Fyne Restaurants, said on Thursday adjusted pretax profit for the year to April 28 was 162 million pounds, in line with analysts' expectations and ahead of 152 million posted a year ago.

While Britain's pubs have closed at an alarming rate during the downturn, some such as Greene King with a value-led food offering are benefiting from rising demand from cost-conscious customers for casual dining over pricier eateries.

The group's retail, or managed division, underpinned the profit rise with total sales up 7.4 percent to 863.6 million pounds and like-for-like sales increasing 2.3 percent despite a sharp second half slowdown due to poor weather across Britain.

Average core earnings per pub at its smaller tenanted division rose 4.2 percent, although total revenue fell 5.5 percent to 153.7 million pounds, partly due to pub closures.

"We have made a strong start to the year, but the overall outlook remains subdued and we are not assuming a pick-up in the economy," chief executive Rooney Anand said, adding he was confident his business would still prosper in such conditions.

Retail like-for-like sales were up 3.3 percent in the first eight weeks of the new financial year, the group, which also benefits from a greater exposure to the more affluent south east of England, said.

Shares in Greene King, which has around 2,300 pubs, restaurants and hotels in Britain, are up 42 percent on a year ago and closed at 746 pence on Wednesday. The firm recommended a final dividend of 19.45 pence per share, up 7.5 percent on last year.

(Reporting by Neil Maidment, Editing by Brenda Goh)