Price rises boost Imperial

The group, which sells over 340 billion cigarettes annually of brands such as Davidoff, Gauloises, JPS and West, said revenue would rise around four per cent for its year to end-September when stripping out currency fluctuations.

Overall volumes were seen falling about three per cent.

Imperial aims to counter Europe’s downturn by offering economy-brand cigarettes, such as JPS and Lambert & Butler and roll-your-own products, while raising prices for more affluent consumers in western Europe and the United States.

It said while growth was particularly strong in eastern Europe, Africa and the Middle East and also in its Asia Pacific region, volumes were hit by weakness in Poland, Spain and Ukraine, as well as by sanctions in Syria.

Imperial has suffered in Ukraine due to increased illicit trade in cigarettes on which no duty has been paid, while its business in Poland for hand-rolling tobacco was hit as farmers sold more tobacco directly to consumers.

Volumes have been falling in Spain - its third-biggest market after Britain and Germany - due to recession and high unemployment, while United Nations sanctions since the middle of 2011 have halted its trade to Syria.

The group said strategic brands such as Davidoff and Gauloises were expected to see strong volume and revenue gains as they continued to represent a rising proportion of the group’s overall cigarette volumes.

Imperial said its operating performance and financial position were in line with its expectations as it gave a trading update towards the end of its financial year to Sept. 30 and ahead of annual results set for October 30.