CIGARETTES group Imperial Tobacco posted a 40 per cent rise in pre-tax profits to £898m as it boosted its UK market share to the highest for two decades.

Imperial, which is behind the Embassy and Lambert and Butler brands, said its share of the home market had risen to 44 per cent after "another very successful year".

Pre-tax profits in the year to September 30 topped some analysts' expectations of about £880m and operating profits rose 44 per cent to £1.1bn.

Imperial said cost savings from the integration of German firm Reemtsma, which it bought in March last year for £3.5bn, were £150m, ahead of expectations of £140m.

Chief executive Gareth Davis said: "We have never been in a better position to continue our proven track record of driving sustained profitable growth."

Imperial is the world's fourth largest tobacco company, with products sold in more than 130 countries.

It is the global leader in roll-your-own tobacco and rolling papers and has grown cigarette volumes from 42 billion in 1997 to more than 220 billion today.

It said UK operating profits grew to £406m from £390m, with margin growth of 53.4 per cent against 51 per cent in the previous year.

In another of its big western European markets, Germany, overall market share grew to 21.4 per cent as operating profits grew to £228m from £67m.

In the rest of western Europe, Imperial said it had seen good trading performances.

The group's rest of world operations saw overall profits improve and there was "positive volume progress" in central and eastern Europe, where its West brand grew by 18 per cent.