New brands a boost for Imperial

IMPERIAL Tobacco, the world's fourth-largest cigarette company, yesterday said it was on track to hit City forecasts this year, boosted by its new Spanish and French brands.

The maker of Lambert & Butler and West cigarettes acquired Altadis in January 2008 for just over 10 billion, adding continental brands such as Gauloises and Fortuna to its portfolio.

Yesterday, the Bristol-based group said the integration of the acquisition was on track to deliver expected cost-savings for its financial year ended 30 September. Imperial is aiming to make annual savings of 400 million (361m) by 2012.

Despite the recession having some impact on volumes, tobacco companies have remained robust as prices have held up.

Imperial said two months ago that the rate of decline in its UK market had slowed due to fewer purchases of brands abroad as the impact of a weaker economy and currency reduced overseas travel.

Analysts at Killik & Co said in a note that Imperial's premium brands were driving increased sales in developing markets, and that its "value" brands were helping it maintain sales where customers were trading down in more established markets.

Julian Hardwick, at house broker RBS, said tobacco was "the most attractive of the European consumer staples sectors".

Imperial's products are sold in more than 160 countries with manufacturing at 58 sites worldwide. Its shares rose 6p to close at 1,758p.