Austerity-hit European smokers cut into Imperial Tobacco's first-half profits as they switched to roll-your-owns and illegal cigarettes.
The change was most stark in Spain, one of Imperial's major markets, where sales of cigarettes fell by 12 per cent but sales of cut tobacco soared by 60 per cent.
Operating profits for the six months to March fell by 6.5 per cent to £1.4bn on sales down 4 per cent at £13.4bn. The dividend goes up 11 per cent to 35.2p a share.
Alison Cooper, the chief executive, said cost-cutting and innovations in brands should drive a resumption of growth in the second half.Reuse content