Turnover for the six months ended June 30 was £73.7bn, compared with £70bn last year. Pre-tax profit however dropped to £162m from £188m last year.
Chief executive Nigel Northridge said: "These are good results. We have demonstrated volume, profit and dividend growth."
Northridge said that he was particularly pleased with Gallaher’s market share gains in key EU countries, particularly France, Spain and Italy. He said that the group had concluded a joint licensing agreement with Shanghai Tobacco for China and Russia.