BREWER Scottish and Newcastle (S&N) yesterday announced it is to make £50m of cuts over the next three years, while also revealing its annual turnover had broken the £4bn barrier.

S&N confirmed more redundancies could be on the way throughout its UK and international operation.

But the group would only add that it was looking at a number of options as to where the cuts would fall.

The revelation came on the day S&N, which expects to lose £10m profit with the introduction of the smoking ban later this year and £20m through rises in input prices, revealed a seven per cent increase in turnover to £4.1bn for the year ending December 31, and a 13 per cent rise in pre-tax profits, to £452m.

The performance was bolstered by Gateshead-produced Newcastle Brown Ale's growing presence in the US, with strong sales contributing towards a "great year" internationally for the brand.

The group, which employs about 4,500 people in the UK, also saw strong performances from its Foster's, Kronenbourg 1664, Strongbow and John Smith's brands.

Despite the strong performance, S&N announced it was planning to make £50m of savings across all aspects of the business by 2010.

Finance director Ian McHoul said: "We are looking at a number of options. They may involve job reductions, but where they do, our people will be the first to know about them and we will make every effort to ensure that people who want to stay with us in another role can do that."

Last month, S&N cut 66 jobs at the Federation Brewery in Dunston, Gateshead, when it transferred bottling of Newcastle Brown Ale to its site in Tadcaster, Yorkshire.

The Northern Echo revealed yesterday that up to half of the workers could be found alternative employment elsewhere in the business.

However, a further 22 jobs remain at risk with a review into kegging at the Dunston site, which is expected to be completed within eight weeks.

Vinay Bedi, fund manager at Tees Valley investment managers Wise Speke, said: "We all know the UK beer market is tough, we know margins are under pressure, we know the smoking ban will impact in the short term. Yet management has manoeuvred S&N into such a strong worldwide business that the UK is producing well below half of all sales."