Full-year sales, profits spark at Imperial Brands
Imperial Brands Plc posted an uplift in sales and earnings on Tuesday, supported by higher prices and growing demand for the tobacco group's range of next generation products.
Net revenues from tobacco and next generation products (NGP) rose by 4.1% on a constant currency basis to £8.3bn in the year to 30 September.
Cigarette volumes were 1.7% lower, but strong pricing helped left net revenues 3.7%. NGP revenues surged 13.7% to £368m.
As well as traditional cigarettes Gauloises, Davidoff and Winston, Imperial owns various NGP, including e-cigarette blu, nicotine pouch Zone and Pulze, a heated tobacco product.
Operating profits were 4.6% stronger at £4bn.
Newly-installed chief executive Lukas Paravicini said: "Our consistently strong operational and financial delivery provides a firm platform on which to build as we embark on the net phase of our strategy.
"Our performance adds to our track record of consistent growth, demonstrating the sustainability of our tobacco business and the exciting growth opportunities in next generation products."
On a reported basis, group revenues - which include revenues sales of peripheral products and distribution revenues - ticked 0.7% lower at £32.2bn. Earnings per share shed 16.5% to 251.1p.
Imperial attributed the fall in EPS to a higher tax charge, which was partly offset by the impact of lower finance costs and reduced share count.
Looking to the current year, Imperial said it expected to deliver low single-digit tobacco and double-digit NGP net revenue growth.
Adjusted operating profit is expected to grow by between 3% and 5%, driven primarily by growth from its combustible tobacco business.
However, at current rates, foreign exchange translation is expected to act as a tailwind of around 2% and 2.5% to net revenue adjusted operating profits and EPS.
Paravicini took over last month from Stefan Bomhard, who retired after five years in the role. Bomhard was widely credited for strengthening Imperial, by refocusing on its core markets and tobacco business while also expanding in smoking alternatives.
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