Imperial in return to sales growth

Imperial Tobacco cheered investors yesterday with a return to sales growth in the last three months of 2010.

The world's fourth-biggest cigarette maker - which owns brands including Lambert & Butler and Golden Virginia - reported sales gains for both loose tobacco and cigarettes in the first quarter of its financial year to 31 December, with volumes up 6.3 per cent and 0.5 per cent respectively.

The group has benefited from demand for value brands and sales of its products in emerging markets.

Stick equivalent sales volumes - a measure that covers both cigarettes and loose tobacco - rose 1.2 per cent in a turnaround on the 2.9 per cent drop seen in its last financial year.

Imperial said its UK arm held sales volumes largely stable at 56.3 billion in the 12 months to December against 56.6 billion in 2009. The firm's share of the UK cigarette market edged up by 0.1 per cent to 45.3 per cent, but its share of the loose tobacco market fell from 57 per cent to 53.5 per cent.

The group has raised prices twice in the UK since September, with the latest hike sparked by the UK government's move to increase VAT to 20 per cent.

The price increases have added an average of between 29p and 35p per pack.

Imperial has seen cash-strapped UK consumers turn to cheaper economy brands and cut tobacco in the past few years.