Shares in Imperial Tobacco were up on the FTSE 100 after the group said that it expected its results for the full year ended 30 September to be in line with expectations.
Net revenues from tobacco are expected to be around three per cent higher than last year.
The group said that its global strategic cigarette brands were performing well, with volumes of Davidoff and West growing and Gauloises Blondes sales also improving in the second half of the year.
Volumes of fine cut tobacco are expected to be up around six per cent, while volumes of white stick are forecast to drop approximately three per cent.
Alison Cooper, Chief Executive of Imperial Tobacco, said, "We continue to drive shareholder returns through our enhanced focus on sales, ongoing cost optimisation and the effective use of our cash and I am pleased with our financial delivery given the challenging environment in a number of markets this year. We remain focused on developing our brand and product portfolio across our regions, responding to consumer shifts within our cigarette and other tobacco product portfolio, to maximise our sales potential."
Richard Hunter, Head of UK Equities at Hargreaves Lansdown Stockbrokers, commented, "The update has been cautiously well received, with pressure on sales being offset by a reasonable rise in revenues.
"Central Europe has tended to carry the flag in more recent updates, as other regions have fallen foul of tougher economic conditions and increased government taxes on tobacco. The company has continued to focus on stringent cost control, whilst the price inelasticity of its products remains supportive. The company is currently yielding a healthy 3.8%, whilst its geographical diversification provides an element of safety.
"In all, the shares have failed to exhibit their defensive strength on any recent measure. For example, whilst the wider FTSE100 has lost 1% over the last six months, Imperial shares have shed 7%. Nonetheless, the company remains well placed on a longer term view for whatever growth may become available and the general market consensus is that the shares are a strong buy."
By 08:50 shares in Imperial Tobacco were up 1.48 per cent on the FTSE 100 to 1,921.00 pence per share.