BP, Rolls-Royce drive Britain's FTSE higher as earnings impress

* FTSE 100 up 0.8 pct

* BP jumps after Q2 profit beats forecasts

* Intertek hits record high as weak pound helps results

* Mid-cap lender CYBG (Frankfurt: 42YA.F - news) climbs after results (Adds investor quotes on dividends)

By Helen Reid

LONDON, Aug 1 (Reuters) - Britain's leading shares made strong gains on Tuesday, supported by oil major BP and Rolls Royce among a raft of robust results, while a recovery in cigarette makers British American Tobacco (Kuala Lumpur: 4162.KL - news) and Imperial removed a drag on the benchmark.

The FTSE 100 jumped 0.8 percent, starting the month on a firm footing, while mid-caps rose 0.4 percent. Blue-chips were little changed after a survey showed a boom in exports helped UK manufacturing growth recover in July.

Oil major BP was the biggest contributor to large-cap gains, adding 12 points to the index as its shares jumped 3 percent after beating profit expectations for the second quarter.

"BP's 37 percent beat versus consensus (3 percent versus UBS estimates) was driven by a very strong result in the Upstream, part offset by weaker earnings in the Downstream," said UBS analysts.

"BP had pre-announced the $750 million exploration write-off related to Angola but the remaining charge was lighter than forecast," they added.

Tobacco stocks BAT and Imperial Brands (LSE: IMB.L - news) enjoyed a slight recovery, rising 1.6 and 1.4 percent respectively after sharp losses the two previous sessions as investors digested a U.S. regulatory clampdown on the amount of nicotine in cigarette products.

Although BP kept its dividend flat at 10 cents per share, some investors fretted about possible threats to the British market's strong dividend yield.

"What happens if tobacco profits are regulated to a fraction of their current levels and the oil companies have to ramp up their investment into renewables?" mused Jim Wood-Smith, head of research at Hawksmoor Investment Management.

"None of this may happen, but for those relying on investment income, it is a kick up the backside that it must be properly diversified. Cuts in tobacco and oil dividends may well come and we have all been warned," he added.

Shares (Berlin: DI6.BE - news) in engine maker Rolls Royce (LSE: RR.L - news) climbed 7.5 percent after a solid first half which saw profits rise more than expected as it delivered a 27 percent increase in large civil aerospace engines.

Testing firm Intertek jumped 8.6 percent after reporting a 21.9 percent rise in first-half profit, helped by the fall in sterling.

Earnings from Centrica (Frankfurt: A0DK6K - news) sent the stock up 2.1 percent, with Britain's largest energy supplier announcing an increase to its electricity prices despite losing another 485,000 customers since May.

Insurers also contributed to gains, with shares in Direct Line, Britain's largest motor insurer, up 6.5 percent after the firm reported a 9.5 percent rise in first-half profit, helped by strength in auto insurance premiums.

Peer Admiral, which reports earnings on Aug. 16, also gained 2.9 percent.

Fresnillo (Frankfurt: A0MVZE - news) was the worst-performing of just a handful of fallers, down 1.6 percent despite reporting a doubling of profit for the first half.

Analysts at Shore Capital pointed to a strong balance sheet but a "relatively paltry" interim dividend. "Stronger second half should see a more generous final dividend, we think," they wrote in a note.

Mid-cap lender CYBG gained 7.1 percent after confirming its full-year targets, and saying costs for the full year would be at least 10 million pounds lower than previously thought.

"Overall this is a good quarter for CYBG but we continue to expect that margins will remain under pressure with Standard Variable Rates amongst the highest in the sector," said KBW analysts.

Shares in hedge fund Man Group (LSE: EMG.L - news) climbed 4.4 percent, putting the stock among the best-performing in Europe, after assets under management rose 19 percent in the first half.

(Reporting by Helen Reid; Editing by Keith Weir)