British American Tobacco (BAT) yesterday posted a 20 per cent rise in profits and said a business-transforming deal in the US had shown early promise.

Fewer exceptional costs than a year ago helped the profits figure in the nine months to September 30 to improve to £1.54bn, although BAT continued to be affected by the weakness of the US dollar against sterling.

The company's profits last year were dented by one-off costs, including the cost of closing its Darlington plant.

BAT ceased production in the town in June with the loss of nearly 500 jobs.

The group, whose brands include Kent, Dunhill, Lucky Strike and Pall Mall, left £1m to Darlington to help job creation in the town when it pulled out.

Operating profits before the boost from exceptional items only edged ahead to £2.14bn, the world's second largest tobacco producer said.