CIGARETTES group British American Tobacco (BAT), which is to axe its Darlington plant, has announced a small rise in profits.

Half-yearly figures showed a two per cent rise in profits and a ten per cent increase in its interim dividend.

The London group said overall operating profits, excluding goodwill and one-off items for the six months to June 30, were £1.4bn, as all the company's regions apart from America Pacific made increased contributions.

But pre-tax profits fell 25 per cent at £762m, following the restructuring of its business in the UK and Canada. The dividend to shareholders will increase to 11.8p.

Earlier this month, BAT said it was closing its Rothmans factory in Darlington with the loss of about 490 jobs, which represented about 20 per cent of the group's 2,400 staff in the UK. Globally, it employs about 70,000 people.

Two years ago the company closed its manufacturing operation in Spennymoor and a packing plant in Peterlee, both County Durham.

Chairman Martin Broughton called the figures "a solid set of results in the current economic environment" and said the ten per cent increase in the half- yearly dividend underlined the group's confidence in the future. He said: "In a challenging year, we remain very much on track."

After the restructuring, BAT will employ about 2,000 people at sites in Southampton, Aylesbury, Corby and the group's London head office.

It said the closure of the Darlington factory was to move production to sites more local to their markets, particularly in South Korea and Nigeria.