Profits up 20% at tobacco giant

Cigarette maker Imperial Tobacco said today it increased its slice of the UK cigarette market as it announced a 20% rise in half-yearly pre-tax profits to £454m (€682m).

Imperial said continuing success of the Richmond range and growth in the king-size version of its market-leading Lambert & Butler brand helped it grow its domestic market share in the six months to March 31 to 44.6% from 43.8% the year before.

The group also succeeded in raising its share of the UK roll-your-own tobacco market, where it sells Drum and Golden Virginia, to 65.1% from 64.2% previously.

UK operating profits rose 18% to £209m (€313m), representing 37% of group adjusted operating profits in the first half to March 31.

Imperial said the improvements reflected a relatively stable UK market and improved pricing in the face of a rise of just over 9p in tax on a packet of 20 cigarettes in the March 2004 Budget.

The group said in January that it was closing three factories in central Europe and cutting 940 jobs.

It said today that it had also cut about a further 700 jobs from its global 16,000-strong workforce, including about 60 jobs at its site in Nottingham.

Imperial said most of the cuts had already taken place and were spread across “quite a number of facilities”.

It announced a 25% increase in the interim dividend to 15p and said it was expecting another strong performance from the UK in the second half.

“The trading outlook for the group for the current financial year remains in line with our expectations,” said chief executive Gareth Davis.