Tobacco company Imperial Brands increased profitability in the year to 30 September, despite a decline in volumes of tobacco products sold.
Total tobacco volume was down 4.1 per cent, though the group's 'growth brands', which include Davidoff and Winston, grew 5.5 per cent.
Revenue was up 9.5 per cent to £30.2bn on a reported basis. Operating profit was pushed up 2.2 per cent to £2.3bn and earnings per share more than doubled to 147.6p.
While tobacco net revenue grew 8.2 per cent on an adjusted basis as a result of favourable exchange rates to £7.8bn, it dropped 2.6 per cent in constant currency terms.
Why it's interesting
Rivals of Imperial Brands have already begun to put products out into the vaping and tobacco heating markets. Imperial said today that it had a programme of new next generation products on the way and would be trialling other potential new products.
This comes at a time when most big tobacco firms are reporting declining sales of cigarettes, while more consumers turn to vaping as a method of quitting or as a hobby.
But next generation products are already subject to tight restrictions under the latest EU directive, and the UK could add to this as e-cigarettes are scrutinised by MPs.
What Imperial Brands said
Chief executive Alison Cooper said:
As anticipated, whilst the increased investment impacted current year revenue and profit it is strengthening the business to support improved top-line growth going forward from both tobacco and next generation products.
She added that, despite "a tough trading environment", the company was protecting its own investments.