IMPERIAL Tobacco has seen first-half profits rise by 16 per cent despite recession-hit smokers ditching high-end brands in favour of roll-ups.
Profit rose to £1.18bn in the six months to the end of March at the fourth biggest cigarette maker in the world, whose brands include Lambert & Butler. The rise came despite a 3.7 per cent drop in volumes for the period, as price rises in Western Europe pushed up overall sales and earnings.
Gareth Davis, the company’s outgoing chief executive, said: “Cigarettes have risen in price quite dramatically over the last few years, because of the need to raise taxes.”
Imperial posted adjusted earnings for the half-year of 83.2p a share compared to consensus expectations of 81.4p. Its operating profits grew six per cent to £1.45bn and its net revenue was up four per cent at £3.39bn. Earnings were boosted by the weaker pound, cost savings from its 2008 Altadis takeover and lower interest costs.
Its shares closed 0.3 per cent higher at 1,953p, having underperformed the FTSE 100 by six per cent this year.
Chief operating officer Alison Cooper will take over the reins of the firm from Davis next month.