Tobacco firm Gallaher said today that the underlying market in Ireland was broadly flat, as the market stabilised after the initial impact of a ban on smoking in workplaces introduced in March 2004.
The group met forecasts with a 5.3 per cent rise in first-half profit today, as growth in emerging markets balanced a decline in western Europe.
Sales in Germany were hit by the popularity of rolling tobacco "singles", in Austria by tax increases and in Italy by a ban in January on smoking in public places. But group sales by volume rose 3.5 per cent to 82.1 billion cigarettes.
"Growth was driven by market share gains across the former Soviet republics and certain markets, notably Poland, the Czech Republic, Denmark, Romania, Estonia, Lithuania and Slovakia, which more than offset adverse conditions in some key western European markets," said the world's fifth-largest cigarette maker.
Gallaher's shares, which have outperformed an index of its European peers by 9 per cent over the past 12 months, eased 0.6 per cent to 853p this morning valuing the business at £5.6 billion pounds.
Gallaher made £263 million in pre tax profit in the six months to the end of June, on turnover down 0.2 per cent at £3.95 billion .
European volume sales declined 3.7 per cent to 21.3 billion cigarettes, but in former Soviet bloc they grew 11.3 per cent to 44.3 billion.