BRITISH American Tobacco has posted nine-month underlying profits of £1.96bn.

The company, which closed its Darlington factory last year with the loss of 500 jobs, saw the profits rise from the £1.8bn seen a year earlier.

It said it was heading for a highly satisfactory year after volumes of its top four brands rose nine per cent in the first nine months of the year.

BAT, whose brands include Pall Mall and Kent, strengthened its position in nations such as Russia and Romania despite a shrinking tobacco market elsewhere in Europe.

Underlying profits of £1.96bn in the period from January to September were higher than the £1.8bn seen a year earlier, although one-off gains last year from a deal involving Reynolds American meant the headline figure was 43 per cent lower at £1.9bn.

BAT chairman Jan du Plessis said the company had maintained its momentum but it was about to enter its toughest period of the year so far in terms of comparing profits.

That is because BAT banked significant tax and interest benefits in the run-up to Christmas last year that will not be repeated in 2005, he said.