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Tough markets in the UK and Spain put a drag on cigarette sales in the last three months at Imperial Tobacco, which makes Lambert & Butler, West and Gauloises. The company’s global cigarette volumes fell 1 per cent in the six months to the end of March, against a 1.2 per cent rise in the first quarter, as trade buying before last September’s price rise shifted spending to the second half.
Imperial, which makes more than 300 billion cigarettes a year, said Spain stayed tough due to a December tax rise, a public smoking ban this year and economic woe hitting sales of top brands.
The group said it had increased volumes of global brands Davidoff, Gauloises Blondes and West, with good results in emerging markets. The company, which forecast full year results in the year to September 30 in line with hopes, said it expected first half tobacco revenues to rise about 2 per cent.
“We have continued to deliver strong growth in fine-cut tobacco volumes,” Imperial said.
However Investec Securities said: “The news from the two key markets of the UK and Spain is a material negative in our view.”
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