Imperial Tobacco boosted by price hikes

Cigarettes giant Imperial Tobacco grew profits by 5% in the UK today after price increases helped offset the impact of a slowing domestic market.

The maker of Lambert & Butler and Richmond added six pence to a pack of cigarettes in October, leading to UK revenues less duty rising 2% to £395m (€568m) and profits reaching £233m (€335m) in the half-year to March 31.

Imperial said cigarette volumes declined by 500 million to 11.4 billion in the UK in the period, although it pointed out its share of the market improved.

Across the group, cigarette volumes were up 9% to 86.3 billion with profits from operations up 4% to £592m (€851m).

The company is the world’s fourth largest tobacco company with 14,500 employees and 32 manufacturing sites.

Imperial said earlier this year that it believed a smoking ban in England and Wales was likely to have little long-term effect.

It forecast many people would stop lighting up in the immediate aftermath of the ban but that smokers were likely to return to their favourite brands over time, scuppering a key aim of the UK's Health Bill.