Boosted by last year's $1bn acquisition of American Tobacco, as well as purchases in Uzbekistan and Russia, cigarette volumes soared 22 per cent in the first half to 325 billion. But there was also 12 per cent growth in underlying sales, helped by the restoration of the feel-good factor in Brazil since the imposition of last July's Rial plan by the government.
Despite the difficulties facing the UK life and pensions industry, Allied Dunbar has raised its market share in life products from 4 to 4.5 per cent since the first half of last year and in pensions took 6 per cent, up from 5 per cent before. The news came alongside good figures from rivals Lloyds Abbey Life and Commercial Union, which announced that new single premium business rose 83 per cent in the first half.
Sir Patrick Sheehy said there had been an outstanding performance from tobacco, while there were "distinctly encouraging features" from the Farmers insurance to Allied Dunbar financial services operation. "The group as a whole is very much on track for a substantial increase in pre-tax profit, compared to 1994's pounds 1,802m", he said, announcing an interim dividend raised 9 per cent to 9.25p.
Pre-tax profits up 22 per cent to pounds 1.15bn, with earnings per share raised from 19.4p to 22.5p, came in well ahead of analysts' expectations for the group and the shares added 16p to 521p yesterday. Nyren Scott-Malden at Barclays de Zoete Wedd described them as excellent figures, saying he would be raising his full-year forecast from pounds 2.23bn to around pounds 2.28bn.
Cigarette volumes in Brazil grew 34 per cent, pushing the Souza Cruz subsidiary back into profit after a break-even position last year.
Comment, page 19Reuse content