Sports Calendar

The holy grail for all tobacco companies is the “safe cigarette”. Now there may never be such a thing as a safe cigarette but the likes of BAT and its old US activities, such as Brown & Williamson, have been working on a safer cigarette for some time. By treating the tobacco and using a three-process filter, the aim is to give smokers the same hit and taste — but less of the toxins.

Indeed, Advance Lights (a safer cigarette) have been test-marketed in Indianapolis, Indiana, by Brown & Williamson for some time and it may be that this product is now ready to be launched in other territories.

That’s where Filtrona could come in. Not surprisingly, projects such as these are shrouded by a smokescreen of secrecy, but it would be sensible to assume that Filtrona will have a part to play in the manufacture of safer cigarettes.

If BAT is to get its product to market first, then others will surely follow and that, too, would benefit Filtrona as the largest independent supplier of special filters.

Judgment: Hold the shares, but there may be a whiff of something in the air.

Filtrona at a glance

Share price: 269½p

Market value: £591m

Year end: December 31

Consensus forecast for 2005 pre-tax profit: £52.6m

Consensus forecast for final dividend: 6.28p

Investment managers Fidelity and Ivory are the largest shareholders with 8% each. Brahman Capital and Legal & General own 4%.