BAT reports 8.5% profits rise

British American Tobacco today said profits had risen by 8.5% on the back of good profit growth across most of its businesses.

British American Tobacco today said profits had risen by 8.5% on the back of good profit growth across most of its businesses.

The group said pre-tax profits in the first quarter to March 31 increased to £624m (€916.7m) from £575m (€843.7m), after four of its five regions produced results well ahead of the previous year.

BAT, whose flagship brands include Dunhill, Kent and Lucky Strike, said European profits increased by £30m (€44m) to £181m (€265.6m).

There were good performances in all other regions apart from America Pacific, with Japan and Canada both showing lower profits and volumes.

BAT said the impact of changes in accounting for the merger of its US business Brown & Williamson with RJ Reynolds, and the sale of Italian distribution business Etinera, dragged first quarter profits from operations down by 4%.

The group merged B&W with American cigarette firm RJ Reynolds into new business Reynolds American last year, and sold Etinera after buying Italian state tobacco company Ente Tabacchi Italiani (ETI).

However, it said profits from operations in its subsidiary companies were 6% higher after excluding those changes.

Chairman Jan du Plessis reminded investors that comparisons with 2004 would become tougher in 2005 after bearing in mind various one-off tax benefits in the second half of last year.

However, he added: “The year has clearly started well, benefiting from the Reynolds American transaction, as well as good profit growth in all regions apart from America Pacific.”

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