Britain's biggest pubs group emerged from the worst six months for the on-trade industry in years by limiting its profit fall to 11%.

But while Enterprise Inns counts the cost of the consumer confidence crash and the smoking ban, shareholders cheered a 12% rise in the interim dividend to 5.8p and news that the payouts are likely to double next year.

Enterprise which owns 7785 pubs around the country is in talks with Revenue & Customs over converting to a Real Estate Investment Trust tax shelter. "If we take the decision to become a Reit, the important thing is that there will be no change to the operation of our business and our licensees will notice no difference," said chief executive Ted Tuppen.

Reits allow property-based companies to avoid corporation tax if they commit to paying 90% of their tax-free income in dividends to shareholders. "Under the new tax structure, our rate of tax will fall to around 6% to 7% and the dividend payout is likely to double," said Tuppen.

Limiting the fall in pre-tax profits in the six months to the end of March to £132 million proves the future of the British pub is assured, he added. "Our results show the benefits of having good quality pubs," Tuppen said. " It remains very important that a pub has a good bar trade, a steady regular footfall, an atmosphere. But food is very important too and much pub food now is extremely good."

Tuppen fears business will remain difficult this summer.

"The fine weather means pubs are busier but customers have a lack of cash because their bills are going up and a lack of confidence because the value of their houses are going down," he said.