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Full year highlights

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• ��Group revenue was up by 2.8% at constant rates of exchange. Reported revenue was 8.4% lower, as a result of adverse exchange rate movements.
• ��Adjusted Group profit from operations increased by 4.4% at constant rates of exchange and decreased by 7.2% at current rates of exchange.
• ��Profit from operations, at current rates of exchange, was 17.7% lower at £4,546 million, impacted by a non-tobacco litigation charge and adverse exchange movements on a translational and transactional level.
• ��Operating margin, at current rates of exchange, grew by more than 50 basis points to 38.7%.
• ��Adjusted diluted earnings per share, at constant translational rates of exchange, were up by 7.9%, driven mainly by the growth in adjusted profit from operations. At current rates, it was 3.9% lower at 208.1p.
• ��Basic earnings per share were 18.6% lower at 167.1p (2013: 205.4p).
• ��Group cigarette volume was 667 billion, a decline of 1.4% against an estimated industry decline of 2.5%. Total tobacco volume was 1.3% lower.
• ��Our Global Drive Brands had a very strong year growing volume by 5.8%, primarily driven by Dunhill, Rothmans and Pall Mall.
• ��The Group intends to invest US$4.7 billion to maintain a 42% shareholding in the enlarged Reynolds American Inc., after its proposed acquisition of Lorillard, which is contingent on regulatory approval.
• ��23 million shares were bought back at a cost of £795 million, excluding transaction costs. Due to the intended investment in Reynolds American Inc., the share buy-back programme was suspended from 30 July 2014.
• ��On 23 February 2015, the Group announced that it is evaluating a possible public tender offer to acquire up to all of the 24.7% of Souza Cruz shares which it does not own.
• ��The Board has recommended a final dividend of 100.6p, taking the 2014 total dividend to 148.1p per share, an increase of 4%, in line with the intention to grow dividends in real terms.

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Richard Burrows, Chairman, commenting on the year ended 31 December 2014

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“The Group continued to perform extremely well despite challenging trading conditions. We grew revenue and profit at constant rates of exchange and we increased our market share. Although significant exchange rate movements in many of our key currencies impacted our reported results, the underlying performance of our business remains strong. The increase in our total dividend for 2014 to 148.1p reflects our commitment to growing shareholder returns as well as our confidence in the strength of our business, our strategy and our future.”

Preliminary results for the year ended 31 December 2014 - full announcement (991 kb)