London - British American Tobacco, the world's second-biggest maker of cigarettes, announced on Thursday a slight increase in annual net profit while warning of headwinds in southern Europe.

Earnings after tax grew 3.5 percent to £3.272 billion (R58.6 billion) in 2013 from net profit totalling £3.163 billion a year earlier, the maker of the Dunhill, Kent, Lucky Strike and Pall Mall brands said in an earnings statement.

Revenue was flat but after stripping out currency fluctuations, it grew 4.0 percent to £15.822 billion year-on-year.

“British American Tobacco continued to perform strongly in 2013, with another year of excellent earnings growth and cash flow, partially offset by currency headwinds,” chairman Richard Burrows said in the earnings statement.

“Difficult trading conditions persist in some parts of the world, notably southern Europe, but these results demonstrate that the group's strategy continues to deliver robust profit and dividend growth.” - Sapa-AFP