Altadis rebuffed Imperial's �8bn takeover attempt in April

Pre-tax profits rose 5% to �557m in the six months to 31 March as the volume of cigarettes produced rose 5% to 90.7bn.

The group also remained optimistic about its recent bid for Franco-Spanish tobacco group Altadis.

In April, Imperial's improved bid of 47 euros a share - valuing Altadis at about 12bn euros ($16bn; �8.2bn) in all - was rejected as too low.

Offer hopes

Our experience of the smoking bans in Scotland and other markets confirms our view; it is clear that smokers will continue to smoke Imperial Tobacco Imperial Tobacco share price

"We have had talks with Altadis recently and we seek further constructive dialogue to seek a recommendation," chief executive Gareth Davis said.

"Sometime in the coming month we expect the situation with Altadis to become clearer."

Looking ahead, Imperial said it expected to see "another strong operational and financial performance" in the second half of the year.

As well as increasing cigarette volumes, the group managed to grab a larger share of the UK market, driven by increased sales of the Lambert & Butler brand - boosting profits at the division by 20% to �279m.

Ban impact

The results came despite the start of a smoking ban in public places in Scotland on 26 March, while bans have also since come into force in Northern Ireland and Wales.

"Our experience of the smoking bans in Scotland and other markets confirms our view; it is clear that smokers will continue to smoke, there may be an initial dip in consumption, but this diminishes over time," Imperial said.

In Germany and Western Europe profits dipped slightly, with Imperial blaming a decline in the overall tobacco market.

However, the dip was offset by improved sales and market share elsewhere in the world.

Asia led the increase, with cigarette volumes increasing by 10%, and the group plans to capitalise on its presence in the market by opening a new factory in Taiwan.

"Our success reflected the continued growth of our key cigarette brands Davidoff, West and JPS, supported by robust performances from other brands," Mr Davis added.