Half-yearly report to 30 June 2009

•  Group revenue increased by 24 per cent to £6,780 million as a result of the continued good pricing momentum, volume growth from acquisitions made in the middle of last year (Skandinavisk Tobakskompagni (ST) and Tekel) and the favourable impact of exchange rate movements.  Revenue increased by 14 per cent at constant rates of exchange.
•  The reported profit from operations was 22 per cent higher at £2,111 million with a 23 per cent increase after adjusting items.  Profit from operations, after adjusting items, would have been 13 per cent higher at constant rates of exchange, despite the adverse transactional impact of exchange rates on costs.
•  Group volumes from subsidiaries were 349 billion, an increase of 5 per cent, as a result of the acquisitions of ST and Tekel.  Excluding the benefits of these acquisitions, volumes were down 2 per cent on last year, mainly driven by market declines in Russia, Ukraine, Japan and Mexico.
•  The four Global Drive Brands continued their strong performance and achieved overall volume growth of 5 per cent.  Dunhill was up 8 per cent, Lucky Strike 7 per cent and Pall Mall grew by 10 per cent, while Kent volumes fell 2 per cent.
•  Adjusted diluted earnings per share rose by 25 per cent, principally as a result of the strong growth in profit from operations and favourable exchange movements.  Basic earnings per share were up 17 per cent at 73.23p (2008: 62.48p).
•  The Board has declared an interim dividend of 27.9p, a 26 per cent increase on last year, to be paid on 29 September 2009.
•  The acquisition of an 85 per cent stake in PT Bentoel Internasional Investama Tbk was completed on 17 June 2009 and did not have any impact on profit from operations for the six months to 30 June 2009.
•  The Chairman, Jan du Plessis, commented “Despite difficult economic and trading conditions in many countries, the continued market share growth from our Global Drive Brands, our ability to innovate and our broad geographic spread should continue to stand us in very good stead.  These half-yearly results give us confidence that we are very much on track to deliver another year of strong earnings growth.”

Half-yearly report to 30 June 2009 - full announcement (215 kb)