The first three months of the smoking ban in England were enough to send cigarette sales plummeting, Imperial Tobacco revealed this morning as it said it expects the Spanish regulator to approve its £11 billion takeover of Altadis.

Imperial said the smoking ban and a poor summer combined to undo a buoyant first half to the year, with volumes falling by around 2 per cent for the year to September 30. The smoking ban was introduced in England on July 1.

The company said: "As anticipated, and in line with our experiences in other markets with similar legislation, these have resulted in an initial decline in cigarette market volumes. Once the initial impact of public smoking bans has dissipated, we expect annual cigarette market declines of 3 per cent to 4 per cent in line with the long-term trend."

The company reported a 6 per cent improvement in full-year group pre-tax profits of £1.2 billion this morning, boosted by growth in Asia.

Imperial, the world's fourth largest international tobacco company, said that British revenue had risen 5 per cent to £876 million, while adjusted profit from ordinary activities rose 11 per cent to £564 million, aided by an 8 per cent surge in the volume of fine-cut tobacco.

The UK’s top-selling Lambert & Butler and Richmond economy cigarettes both increased share in the domestic market.

The Bristol-based company expects the acquisition of Altadis, the Franco-Spanish maker of Gauloise, to be completed by next January. The €16 billion (£11.2 billion) deal was approved by the European Commission two weeks ago.

Imperial Tobacco slipped 48p to £23.95 in early trading.

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