Imperial Tobacco profits jump on emerging markets success

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Britain's Imperial Tobacco, maker of Lambert & Butler and Gauloises cigarettes, said Tuesday that first-half net profits soared 34 percent on the back of a strong performance across emerging markets.

Imperial added that it was immediately repurchasing some of its shares, worth a total of £500 million (569 million euros, $818 million), a move which saw its stock price rally by about 3.0 percent.

Profits after tax grew to £926 million in the six months to March 31, compared with £689 million in the same part of 2009/10, the London-listed firm said in a results statement.

"Group sales growth (was) driven by a strong performance in emerging markets outside the EU," the cigarette maker said.

Total sales increased by 3.0 percent to £3.289 billion, as the company shrugged off a weak showing in Spain.

In recent years, Imperial has switched its strategy away from developed regions and towards the world's major growth markets in eastern Europe, Africa, the Middle East and Asia.

"I'm pleased with how we are driving sales growth through our total tobacco portfolio across our international markets," chief executive Alison Cooper added in the earnings release.

"We've delivered good first half results with tobacco net revenues up three percent, earnings per share up seven percent and dividends increasing by 16 percent."

She added: "Our success translates into further dividend increases going forward and a £500 million annualised share buyback programme which is effective from today."

Cooper also noted that Spain remained a "difficult" market for the group as the country's smokers tightened their belts, although the weak performance was offset by "gains elsewhere in the EU" and "growth in emerging markets".

Looking ahead, Imperial said that it would "identify growth opportunities" in the second half of its financial year and manage costs.

The firm's share price leapt 2.92 percent to 2,220 pence in late afternoon trade on London's benchmark FTSE 100 index, which was 1.11-percent higher at 6,008.81 points.

Imperial also produces brands that include Davidoff, Fortune, Gitanes, JPS, Rizla and West. The group bought French-Spanish firm Altadis for about 19 billion dollars in 2008.

© 2011 AFP

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