Smoking Brits lift Imps to record

BRITAIN'S cigarette consumption has leapt by about three billion in the past year, helping power Imperial Tobacco to a record half-year pre-tax profit of £261m, up 17%.

Chief executive Gareth Davis said much of the domestic expansion was occurring at the lower end of the market, where Imperial saw growing demand for its Lambert & Butler and Richmond brands.

It said it has 43% of the British market, up four points from a year ago. This, combined with growth in trendier brands such as Marlboro Lights, generated an 11% rise in Imperial's British operating profit to £170m in the year to the end of March. The figure was also lifted by the first-time contribution from recently-acquired African group Tobaccor, helping push up profits at Imperial's international division by 16% to £140m.

Profits from Reemtsma, the German cigarettes group acquired in March for £3.5bn, are expected to be included from next month. The deal will lift the debt load by about £2.2bn to £3.5bn.

Earnings per share, which exclude the impact of the £1 billion rights issue to help fund the Reemtsma buy, rose 13% to 35.4p. The dividend is up 11% at 12p.