British American Tobacco Preliminary Announcement - Year Ended 31 December 2005

British American Tobacco Preliminary Announcement - Year Ended 31 December 2005

February 28, 2006

    LONDON, Feb. 28 /Xinhua-PRNewswire/ -- 

    SUMMARY
     
                                   2005                2004
         Change 
     
    Profit from operations 
     - as reported                2,420m pounds       
3,760m pounds   -36% 
     - 'like for like'            2,607m pounds       
2,398m pounds    +9% 
    Adjusted diluted  
     earnings per share           89.34p              
76.62p          +17% 
    Dividends per share  
     declared                     47.00p              
41.90p          +12% 

    -- The reported Group profit from operations was 36 per
cent lower at 
       2,420 million pounds Sterling, mainly due to the
impact in 2004 of a 
       significant 1,389 million pounds gain on the
Reynolds American 
       transaction.  However, profit from operations would
have been 9 per 
       cent higher, or 5 per cent at comparable rates of
exchange, if 
       exceptional items and the changes in the Group
resulting from the 
       merger of the Group's US businesses with R.J.
Reynolds and the sale of 
       Etinera, with the resulting change in terms of
trade, are excluded.  
       This 'like for like' information provides a better
understanding of the 
       subsidiaries' trading results than the 'headline'
change in profit from 
       operations.

    -- On a reported basis, Group volumes from subsidiaries
were affected by 
       the changes in the Group noted above, resulting in a
1 per cent 
       decrease to 678 billion.  Excluding the impact of
these transactions, 
       there was good organic volume growth from
subsidiaries of 2 per cent.  
       The four global drive brands performed well with an
overall growth of 9 
       per cent on a 'like for like' basis.

    -- Adjusted diluted earnings per share rose by 17 per
cent, benefiting 
       from the improved underlying operating performance
and reduced net 
       finance costs, as well as the impact of the Reynolds
American 
       transaction and the share buy-back programme.  The
basic earnings per 
       share was lower at 84.53p (2004: 133.43p).

    -- The Board is recommending a final dividend of 33.0p,
which will be paid 
       on 4 May 2006.  This, together with the interim
dividend, will take 
       dividends declared in respect of 2005 as a whole to
47.0p, an increase 
       of 12 per cent.

    -- The Chairman, Jan du Plessis, commented: "The
outstanding results for 
       2005 demonstrate that British American Tobacco's
strategy is working 
       well and I am confident that we can continue to
deliver quality 
       earnings growth and good cash flow over the long
term."

    For more information, please contact:

    INVESTOR RELATIONS: 

     Ralph Edmondson
     British American Tobacco
     Tel:   [phone] 

     Rachael Cummins
     British American Tobacco
     Tel:   [phone]

    PRESS OFFICE: 

     David Betteridge, Teresa La Thangue, or Emily Brand
     British American Tobacco
     Tel:   [phone]

SOURCE  British American Tobacco