Tobacco Firm Sees Strong Profit Rise

Source from:  This is Bristol 04/30/2010

BRISTOL'S biggest company, Imperial Tobacco, saw its profits rise by four per cent in the last six months, even though hard-pressed smokers are turning to cheaper brands. Over the last six months the firm, which makes Embassy and Lambert & Butler cigarettes, made an operating profit of £1,118 million - an increase of four per cent on the same period last year. Imperial, which is the fourth largest tobacco supplier in the world and has its headquarters in Southville, said that smokers in the UK are turning to cheaper alternatives, such as hand-rolled cigarettes. But despite the changes in the habits of its customers, the company is still selling 44.2 billion cigarettes every year in this country. As reported in the Evening Post, the company announced that it is mounting a legal challenge against government plans to ban the display of tobacco products in shops. And chief executive Gareth Davis, who is standing down later this month, has hit out at the Government again. He said: "We recognise we are a company with a controversial product and have always supported sensible, reasonable and practical regulation. We strongly oppose regulation that undermines the rights of our consumers to enjoy smoking and our commercial freedoms such as product display bans. "If this misguided legislation is implemented, it will simply fuel the growth in the illicit trade of tobacco and create a huge cost burden for retailers who are already under considerable pressure as a result of the difficult economic climate." Mr Davis will be replaced later this year by Alison Cooper, who is currently chief operating officer. He said: "As I approach retirement I would like to take this opportunity to thank all our employees and shareholders for making the last 13 years immensely enjoyable and rewarding. We have built an excellent management team and in Alison we have appointed a first-class chief executive to lead the successful future development of the firm." Imperial said consumers were already economising before the recession hit, as a result of higher taxes, but the trend "picked up pace" during the recession. But the company said its Cuban cigar business continued "to show signs of recovery" especially in Western Europe, Asia and the Middle East. As a result of the increase in profits the firm will pay a dividend of 24.3 pence per share, up 16 per cent on last year. Enditem