ROTHMANS owner British American Tobacco (BAT) has reported strong third-quarter figures as the Lucky Strike-to-Dunhill group continued to defy the economic slowdown.

The cigarette group, whose deputy chairman is former Conservative leadership contender Kenneth Clarke, said pre-tax profits in the three months to September 30 were £589m, compared with £511m a year earlier.

Martin Broughton, chairman, said the company, which has operations in Darlington and Peterlee, continued to make progress in the face of tough conditions.

He said: "The terrorist attacks in the US have had little immediate impact on our businesses, but they have added a further dimension to the economic uncertainties that were already apparent."

BAT said excise increases, including a rise announced in Germany to cover additional security measures in the wake of the attacks, had been "unhelpful".

Group profits in the first nine months of the year in Europe fell slightly to £391m from £418m last time, but were ahead two per cent after stripping out exceptional items. About 166 billion cigarettes were sold in the region during the nine month period - up eight per cent on a year earlier.

Growth was strongest in eastern Europe, with the markets in the UK, Netherlands and Belgium performing less well.

BAT said pre-tax profits were 25 per cent ahead during the first nine months of the year at £1.52bn.