New acquisitions fuelled a £37 million sterling (€60 million) rise in unadjusted profits for the tobacco group Gallaher last year despite evidence that there was a slight fall in the number of people smoking its brands in the UK.

The tobacco group, whose brands include Benson & Hedges and Silk Cut, reported pre-tax profits, before exceptional items, of £387 million for the year to December 2001. Although its UK market share fell slightly, the group's recent overseas acquisitions helped deliver strong sales which boosted turnover by 0.6 per cent to £3.714 billion.

In its latest annual report, Gallaher, which employs more than 1,200 people in Northern Ireland, said the improved turnover had been driven by price rises in the UK because of increased government tax duties and a determined overseas expansion strategy.

The group's international operations doubled their sales to contribute more than £2 billion towards Gallaher's overall turnover last year.

Cigarettes account for more than 90 per cent of Gallaher's overall sales although the group also produces cigars, including the UK's number one brand Hamlet, hand-rolled tobacco and pipe tobacco.