Imperial keeps up overseas growth policy

IMPERIAL Tobacco, the UK's second largest cigarette manufacturer which was recently spun off from Hanson, is to continue its policy of international expansion to counter the continued decline in the domestic tobacco market.

Imperial Tobacco's profits for the six months to March rose just 2 per cent to pounds 146m but its international operating profits rose by a quarter to pounds 45m thanks to the acquisition of Rizla, the world's largest cigarette paper producer, and growth of brands such as John Player Special American Blend.

When its pounds 650m purchase of Douwe Egberts Van Nelle, the Dutch tobacco business, is completed in July, more than 30 per cent of operating profit will come from overseas. However, that deal could be the group's last major purchase for a while.

Gareth Davis, Imperial's chief executive, said: "Sizeable acquisitions are off the agenda in the near future. We need to absorb all that and integrate it." he said of DEVN, adding: "Longer term, we are wedded to the strategy of growing internationally."

International sales growth is "pretty much across the board,'' Davis said. "We've had a strong performance in Europe, which is obviously our main market, but about 30 per cent of our international sales come from our targeted international growth markets of Asia-Pacific and Africa.''

After a strong run, Imperial's shares slipped 1p to 449p yesterday.