British tobacco company Gallaher Group has reported flat annual pre-tax profits held back by the cost of overseas expansion with its Liggett-Ducat purchase in Russia last August and aggressive share buybacks.
But at the operating level profits were up 5.1 per cent fired by a 26 per cent leap in overseas earnings which helped offset a tough and shrinking legitimate UK cigarette market.
Chief executive Nigel Northridge was upbeat about overseas expansion saying Lugget-Ducat had produced £5 million profits in five months and repeated he was interested in an acquisition of tobacco group Austria Tabak.
Gallaher, which produces cigarettes such as Benson & Hedges and Silk Cut reported flat 2000 pre-tax profits at £339.9 million sterling ($491.7 million) while operating profits rose to £438 million after adjusting for acquisition goodwill.
Its shares rose three pence to 449p by 09.30 GMT as profits came in line with expectations.