British American Tobacco posted a 2% rise in annual pre-tax profit despite a 4% drop in sales.

For the year ended december 31 pre-tax profit rose to £2,113m from £2,065m last year benefiting from the absence of exceptional charges and lower net interest paid.

The group said turnover dropped to £24,682m from £25,694m in 2001 as a result of the “planned reduction in duty-free sales and deteriorating economic conditions”.

On the plus side, its four global drive brands including Dunhill, Kent, Lucky Strike and Pall Mall achieved overall growth of 8%.

Chairman Martin Broughton said: “Taking everything into account, we can be pleased with the progress we have made in 2002.”

He added that the board remained confident that BAT would continue to improve its “competitive position, despite the poor outlook for the world economy at present, as well as increasingly challenging trading conditions”.