London, Aug. 8 (Reuters): Scottish & Newcastle Plc, Britain’s biggest brewer, posted a 12 per cent rise in first-half earnings but its UK margins suffered as the soccer World Cup encouraged a switch to take-home beers and larger pack sizes.

The margin concerns sent shares in the Edinburgh-based company down 3 per cent in morning trade. They were the FTSE 100 index’s biggest loser, though the rise in pre-tax profit was in line with analysts’ forecasts.

“It’s the same old story at S&N, with mature markets not giving good profit gains,” said analyst Rob Mann at Collins Stewart, adding that despite the World Cup and good summer weather, the group was not seeing a big gain to its profits.

The world's seventh-largest brewer, whose European beer brands include Kronenbourg, Foster's and Baltika, said on Tuesday the World Cup in Germany boosted the overall UK beer and cider market by 2 per cent in the first half of 2006.

But in Britain, profit margins were pushed down to the upper part of the 8-9 per cent range from 9 per cent, group finance director Ian McHoul said in a conference call on the results.

“There was some modest slippage in UK margins which was largely a World Cup phenomenon,” McHoul said.

Its shares were down 3.0 per cent at 516-1/2 pence by 0920 GMT, after they had risen from 468p in late May and outperformed the UK blue-chip index by 6 per cent since the start of 2006. The group, which is the biggest brewer in the UK, France and Russia, said UK profits, accounting for 40 per cent of its total, only grew 3 per cent, while its international business including France, Portugal, Finland and Belgium saw flat profits, leaving Russia as its only significant growth area.