Unallocated costs, which are net corporate costs not directly attributable to individual regions, were £7 million higher at £103 million, mainly as a result of increased pension costs.
The above regional profits were achieved before accounting for restructuring costs and losses/gains on disposal of a business, brands and joint venture, as explained in Profit from operations like-for-like
.Results of associates
The Group’s share of the post-tax results of associates increased by £39 million to £431 million. Excluding the exceptional items explained in Profit from operations like-for-like
, the Group’s share of the post-tax results of associates increased by £38 million to £427 million.
The contribution from Reynolds American, excluding brand impairment charges and the benefit from the favourable resolution of certain tax matters in both years, as well as other exceptional charges in 2005, was £18 million higher at £285 million. This was mainly due to improved pricing and cost reductions, partially offset by lower volumes. As explained in Changes in the group
, Reynolds American acquired Conwood on 31 May 2006. Reynolds American reported that on a US GAAP pro forma basis, as if it had been owned since the beginning of 2005, Conwood increased margins and profits for the year to December 2006.
The Group’s associate in India, ITC, continued its strong growth and, excluding the one-off items in 2005, its contribution to Group profit rose by £11 million to £91 million.
Associates’ volumes increased by 4 per cent to 241 billion, and with the inclusion of these, total Group volumes were 930 billion (2005: 910 billion).