Gallaher beats ban on advertising

HAMLET cigars and Benson & Hedges cigarettes giant Gallaher shrugged off the impact of the UK tobacco advertising ban and more-generous Customs allowances with a rise in underlying first-half profits.

Shareholders greeted the earnings boost and increased dividend by pushing the shares up 12 1/2p to 574p. Interim profits before charges rose some 5% to £241m. However, pre-tax profits fell from £188m to £162m after a £38m charge to cover the cost of 430 job losses in Ireland and the UK.

Operating profits in Britain were down 1% at £143m as the market contracted by 8% to 10bn cigarettes after foreign travellers' duty-paid allowance was increased from 800 to 3200 cigarettes. The ads ban began in February.

Chief executive Nigel Northridge said he was 'particularly pleased' with market share gains in France, Spain and Italy. Volume growth in continental Europe was 5.7%.

The interim dividend is upped by 7.4% to 9.45p.

'We are very confident we will meet our expectations to achieve high single-figure earnings growth for the full year,' said Northridge.