Gallaher Group, the cigarette company in the midst of an acquisition by Japan Tobacco, said that full-year profit rose 9.2 per cent after the company boosted sales and cut costs.

In a statement, the maker of Silk Cut and Benson & Hedges said income climbed to 403 million pounds (US$ 790.7 million) in 2006, from 369 million pounds in the previous year. Sales rose 2.3 per cent to 8.4 billion pounds (US$ 16.5 billion). In the full year, Gallaher increased production by 5 per cent to 182.4 billion cigarettes. The company also boosted manufacturing productivity by 6.1 per cent and cut costs by 6.3 per cent.
Gallaher’s UK volume sales fell 3.4 per cent to 18.8 billion cigarettes, hit by a ban on smoking in public places in Scotland. In the CIS region, volume sales increased 2.8 per cent to 99.7 billion cigarettes driven by market share gains in Kazakhstan and Ukraine. Strategic brands’ volume sales in the CIS region went up by 20.8 per cent to 44.2 billion sticks.
Japan Tobacco, the world's third-largest cigarette company, agreed in December to buy Gallaher for about US$ 14.7 billion in a deal that gives Japan Tobacco a bigger stake in the Western European market. The transaction is set for completion on 18 April 2007 providing shareholders approve the merger at a 9 March meeting. (pi)