20th Sep 2005 07:04
Imperial Tobacco Group PLC20 September 2005 Imperial Tobacco Group PLCTrading Update - 20 September 2005 Speaking today at a pre-close trading update, Gareth Davis, Chief Executive,will confirm that Imperial Tobacco Group's overall performance for the financialyear to 30 September 2005 remains in line with management's expectations at thetime of the interim results announcement in April. Trading Highlights As the market leader, we have continued to perform well in the UK. We maintainedour cigarette share in a market which declined by around 4% whilst our fine cuttobacco share continued to grow. In Germany, we have delivered good improvements in profit despite the ongoingimpact of successive tax increases on market volumes. We have increased ourcigarette share and seen our fine cut tobacco volumes continue to benefit fromthe growth in the sector. On 14 July Advocate General Jacobs of the European Court of Justice (ECJ)published his opinion and stated that the Singles category should be taxed ascigarettes. We expect the final ECJ ruling later in the calendar year. A further tax increase of 1.2 eurocents per cigarette was implemented by theGerman government on 1 September. At that time, we passed on the tax rise byreducing pack sizes from 19 to 17 cigarettes and lowering the retail price by 20eurocents. We continued to grow cigarette shares in the Rest of Western Europe, withparticularly good performances in Spain, Italy, Greece and The Netherlands,complementing our regional strength in fine cut tobacco. In the Rest of the World region, we have benefited from an improving volumetrend in a number of markets across Eastern Europe, Asia, Africa and the MiddleEast, helped by increased investment, particularly in Eastern Europe. Although pressures in some Central European markets persisted, the second halfhas seen some recovery in our market shares following a number of encouragingbrand launches. We are enhancing our presence in this region by extending ourgeographic platform and product base in Scandinavia. We have recently acquired a43.5% stake in the Swedish snus company, Skruf. Our focus will be on workingwith Skruf to continue the profitable development of the business and leveragingother Imperial Tobacco products through their established selling operation. Theconsideration of £6 million was satisfied in cash with a commitment to purchasethe balance of the shares by mid 2009. The acquisition will be accounted for asa 100% owned subsidiary to reflect the substance of the transaction. During the year we have maintained our focus on cost reduction and havecontinued to review our global manufacturing portfolio in order to remaincompetitive by enhancing productivity and improving efficiencies. During theyear we closed our Dublin cigarette factory and our Montreal filter tubesfactory. Since commencing our share buyback programme on 23 February, we have acquired13.5m shares, representing 1.9% of those in issue, for £199 million at anaverage price of £14.75. Commenting on performance, Gareth Davis said: "We have built on the positive profit momentum of our first half with goodperformances in many markets including encouraging volume uplifts in Southernand Eastern Europe, the Middle East and Asia. "We are well placed to continue to deliver sustainable growth for ourshareholders, leveraging our brands across our geographic footprint, underpinnedby our ongoing focus on cost efficiencies." Full year results for the year ended 30 September 2005, will be announced onTuesday, 1 November 2005. Enquiries Alex Parsons Mobile 07967467241Group Media Relations Manager Simon Evans Office 0117 933 7375Group Media Relations Executive Nicola Tate Office 0117 933 7082Investor Relations Mobile 07967467082 John Nelson-Smith Office 0117 933 7032Investor Relations Mobile 07919391866 Note: The trading update will include a presentation on our main CentralEuropean markets which will be available on our website www.imperial-tobacco.comfrom 16.30 today. Copies of our announcements are available on our website:www.imperial-tobacco.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Imperial Brands