IMPERIAL Tobacco yesterday said that it was launching a £200m share buyback. The firm, which operates a plant in Liverpool producing rolling and pipe tobacco, said in November that it would return funds to shareholders if it did not succeed in finding suitable acquisition opportunities. However, chief executive Gareth Davis said the group remained interested in further acquisitions and would continue to "seek value-creating deals that meet our strict criteria". He added that 2004 had been "a year of further positive progress" for the group and its overall anticipated performance remained in line with expectations. "Despite significant tax increases and ongoing legislative and regulatory challenges, I believe we are well placed to grow the business further in 2005," he said.. The company said it had made a good start to the year in the UK, maintaining its market leading positions in cigarettes and roll-your-own tobacco. The firm, whose flagship cigarette brand is Lambert & Butler, said its annual cigarette market share remained stable at 44.6% and its roll-your-own share increased to 65.9% from 65.6% last September. The group said the annualised UK duty-paid cigarette market declined slightly to £52bn in December from £53bn in September while the rolling-tobacco market held stable at 2,900 tonnes. The group has been cashing in on the growing popularity in the UK of roll-your-own brands, with increasing demand for its Drum and Golden Virginia Tobacco. Imperial raised its product prices in January with cigarettes increasing by an average of 7p per pack of 20. In Germany, the group said profits improved in the first quarter despite cigarette market declines driven by tax duty increases. Imperial said it made good progress across southern Europe in the first quarter, but cigarette market volume pressures had continued so far this year in the northern markets due to sizeable tax increases in 2004, particularly in France and the Netherlands. However, its market share in Ireland, which has banned smoking in public places, rose to 25.1% from 24.8% last September. In relation to the UK's proposed ban on smoking in public places, Imperial said it believed the best approach involved introducing practical solutions such as well-ventilated smoking areas. Shares in the group rose more than 1%, or 20p to 1412p. sophiefreeman@dailypost.co.uk | 
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