Beer giant Heineken has toasted a 9.9% rise in annual earnings ahead of its takeover of UK pub group Punch Taverns.

The Dutch group posted underlying operating profit of 3.54 billion euros (£3 billion) last year, up from 3.38 billion euros (£2.9 billion) and said it sold 3% more beer by volume.

It revealed a 1.15 billion euro hit (£976 million) to revenues from the Brexit-hit pound, as well as currency depreciation in other markets, although turnover still rose by 1.4% to 20.8 billion euros (£17.7 billion).

The group said it is set for further sales and profit growth over the year ahead, but cautioned over "volatile" economic conditions and is expecting a further currency impact of up to 75 million euros (£64 million).

Heineken sealed a deal in December to snap up Punch Taverns with private equity firm Patron Capital.

The deal, which values Punch at £402.7 million, will see the Dutch beer giant buy 1,895 pubs and Patron 1,329.

Heineken and Patron fought off a rival bid from the pub chain's co-founder Alan McIntosh with a 180p-per-share offer.

The deal is expected to go through by the end of the first half of 2017.

Heineken said beer sales by volume declined "slightly" in the UK last year, but premium sales saw double-digit growth.

Global sales of Heineken in the premium market rose 3.7% by volume thanks also to double-digit growth across Brazil, South Africa, Mexico and Romania.

It said new cider drinks were well-received in the UK, with double-digit sales growth in the final six months of 2016.

The group saw ongoing strong sales of Strongbow, with good demand for its Strongbow Dark Fruit and Strongbow Cloudy Apple, alongside Old Mout.

Heineken is the world's number two brewer behind Budweiser firm Anheuser-Busch InBev, which sealed its position as the biggest player after its mammoth £79 billion takeover of SABMiller late last year.