First-half pre-tax profits at Gallaher are up 23.3 per cent as it's on the verge of gaining a toehold in China.
First-half pre-tax profits at Gallaher are up 23.3 per cent as it's on the verge of gaining a toehold in China.
The Benson and Hedges and Silk Cut brands manufacturer which is the number one tobacco company in the Republic has signed a letter of intent with China National Tobacco.
If formal terms can be agreed with CNT and the government, the companies plan an initial 12-month contract manufacture and distribution deal which would cover Russia as well as China.
Gallaher's interim pre-tax profits before one-off items are £223 million, up from £181 million.
But taking account of £36.9 million in amortisation, they are up to £186.5 million from £172.7 million last time.
Group turnover is up 83.9 per cent to £4.22 billion. Much of the growth has come from Continental Europe, where a £74.7 million increase in operating profit to £104.8 million is being put down to a strong contribution from newly-acquired Austria Tabak.
The company has increased its interest charges by nearly £30 million to £68 million as a result of that acquisition, but it says it has offset this by paying back £68.2 million in debt and by seeing average interest rates decline to 5.8 per cent from 6.4 per cent a year ago.
Operating profits in the former Soviet Union are up 33.8 per cent to £18.7 million, mainly reflecting the growth in profit at Liggett-Ducat, which it acquired in 2000.
But operating profits in the UK are down £6.4 million to £148.5 million, while in the rest of the world they are down by £1.7 million to £19.4 million - both as a result of increased sales and marketing spend, and reduced profitability in Africa and the Middle East.
The board is recommending an interim dividend of 8.8p per share, up 8 per cent from 8.15p last time.
PA