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The tobacco company Imperial Brands said currency movements had cancelled out the hit to revenue from falling cigarette sales in the first half.

The FTSE 100 company, which is the world’s fourth-largest cigarette maker by market share, said the number of cigarettes it sold in the six months to March 31 fell 6 per cent to 126bn.

The company said tobacco net revenue, a measure which excludes tax on cigarettes, rose 9.3 per cent to £3.7bn, but this would have been a fall of 5.5 per cent at constant currencies. Total revenue rose 11.7 per cent to £14.3bn.

Operating profits fell 10 per cent to £902m because of increased investment in its main brands. The company is in the process of cutting the number of its brands so that it can focus on fewer but more profitable cigarette lines.

Pre-tax profits rose 78 per cent to £804m because of a sharp fall in net finance costs, which was based to changes to the valuation of derivatives.

Alison Cooper, chief executive, said:

As expected, first half revenue and profit were impacted by the considerable increase in investment. In a challenging industry environment, we are delivering against our strategy and remain on track to meet full year earnings expectations at constant currency. Cash conversion remains strong and we are delivering another dividend increase of 10%.

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