British American Tobacco Plc: Preliminary Announcement - Year Ended 31 December 2006

    LONDON, UK, March 1 /CNW/ -

                                                  2006       2005     Change

    Revenue - as reported                    GBP9,762m  GBP9,325m        +5%

    Profit from operations - as reported     GBP2,622m  GBP2,420m        +8%

    - like-for-like                          GBP2,797m  GBP2,607m        +7%

    Adjusted diluted earnings per share         98.12p     89.34p       +10%

    Dividends per share                         55.90p     47.00p       +19%

    - The reported Group profit from operations was 8 per cent higher at
GBP2,622 million or 7 per cent higher on a like-for-like basis, with
Asia-Pacific, Latin America and the Africa and Middle East regions
particularly contributing to this good result.
    - Group volumes from subsidiaries increased by 2 per cent to 689 billion
on both a reported and like-for-like basis. The reported Group revenue rose by
5 per cent to GBP9,762 million and also increased by 5 per cent on a
like-for-like basis. This excellent volume and revenue growth was achieved
across a broad spread of markets. The four Global Drive Brands continued their
impressive performance and achieved overall volume growth of 17 per cent.
    - Adjusted diluted earnings per share rose by 10 per cent to 98.12p, as
the higher net finance costs and minority interests were more than offset by
the improvement in profit from operations, the share of associates' post-tax
results, a lower tax rate and the benefit from the share buy-back programme.
The basic earnings per share was higher at 92.08p (2005: 84.34p).
    - Following a review of the Group's capital structure, the Board has
decided that there is scope to increase significantly both the dividend payout
ratio and the share buy-back programme. The Board is recommending a final
dividend of 40.2p, which will be paid on 3 May 2007. This, together with the
interim dividend, will take dividends declared in respect of 2006 as a whole
to 55.9p, an increase of 19 per cent. In addition, the level of the share
buy-back will rise from around GBP500 million to some GBP750 million per year,
starting in 2007.
    - The Chairman, Jan du Plessis, commented "2006 has been a good year and
I believe we can look ahead with confidence in our ability to achieve further
growth and value for shareholders. Over the past five years, British American
Tobacco has delivered an average annual total shareholder return of 26 per
cent, compared to 7 per cent for the FTSE 100."

For further information:

For further information: Investor Relations: Ralph Edmondson/Rachael
Brierley, +44-(0)20-7845-1180, +44-(0)20-7845-1519; Press Office: David
Betteridge/Kate Matrunola/Catherine Armstrong, +44-(0)20-7845-2888

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