BAT Industries, the tobacco to financial services giant, picked National No Smoking Day to reveal that cigarettes were the main driver of growth for the group last year.
Sir Patrick Sheehy, BAT's chairman, said consumption of cigarettes in the United States rose slightly last year after years of steady decline. BAT sold 572 billion cigarettes worldwide last year, giving it 10.6 per cent of the world market against 10.3 per cent in 1993.
The group was reporting flat profits of £1.8bn for 1994, struck after a £191m provision for reorganisation costs following its acquisition of American Tobacco. Sir Patrick said American, for which BAT paid £1bn last year, would see significant savings as it was merged with the group's other US tobacco operations.
He also had strong words for the anti-smoking lobby in the US, insisting that BAT would be successful in beating off the wave of litigation faced by tobacco companies in the American courts. "We must be prepared for procedural setbacks," he said, "but we remain as confident as ever that we will win in the end."
Fears about the US litigation damaged BAT's share price last year, but yesterday the shares put on 11p to close at 422p after Sir Patrick's bullish statement.
The company also looked ahead to making further acquisitions and anticipated the outcome of the pensions mis-selling scandal by providing £123m in its reserves for compensation. On a market share basis, that would suggest a bill for the whole insurance industry of about £2bn, according to analysts.
But Sir Patrick said he believed that BAT's UK financial services companies - Eagle Star and Allied Dunbar - would suffer disproportionately less than other players, suggesting a higher bill for the industry as a whole.
Martin Broughton, chief executive, launched a strong attack on the Personal Investment Authority, the new City regulator, for continually changing the definition of mis-selling.
He also confirmed that BAT had looked hard at buying Barings Asset Managment, although no formal offer was made.Reuse content