Southampton-based British American Tobacco report profits up (From Daily Echo)

Southampton-based British American Tobacco report profits up

9:08am Thursday 29th July 2010 in

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THE world’s second biggest cigarette maker has seen profits boom despite falling sales in many of its markets.

Southampton-based British American Tobacco (BAT) reported group profits were up eight per cent for the first half of the year, with sales of some 348 billion cigarettes.

The Dunhill-to-Lucky Strike maker, which has its research and development centre in the city, beat expectations to make a £2.3 billion pre-tax profit.

Revenue grew to |£7.3 billion from |£6.78 billion.

BAT said it was able to raise some prices and had grown its share of sales in its top 40 markets.

But excluding aquisitions of other businesses the number of cigarette sales were down three per cent on last year as a result of industry declines, mainly in Romania, Turkey, Japan and Pakistan.

BAT blamed hikes in duties for a growth in the illicit cigarette trade which had hit low-price cigarettes sales.

Its Dunhill brand was the best performer with volumes up 21 per cent thanks to sales in Brazil and South Africa and strong growth in the GCC, Russia and France.

Chairman Richard Burrows said: “These results show that BAT’s business is in very good shape. While the comparisons with 2009 will become tougher in the second half, shareholders should see another year of good growth in both earnings and dividends.”

The Daily Echo revealed earlier this year how BAT is investing £23m in its Southampton base in a bid to develop a “safe” cigarette.

Southampton’s smoking research centres is currently examining 40 different varieties of safer cigarettes.

A total of 1,100 people now work on the 26-acre Southampton site.

In 2006 more than 100 years of production came to an end with the loss of 550 jobs.