- Imperial said net revenue rose 2.8% in the six months ending in March.
- Tobacco prices rose 8.6%, offsetting a 6.3% drop in volumes
Higher tobacco prices helped Imperial Brands achieve its best organic sales growth in more than a decade.
The owner of the Golden Virginia and Rizla brands revealed that net revenue from tobacco and next-generation products rose 2.8 percent in the six months ending in March.
Tobacco prices rose 8.6 percent, offsetting a 6.3 percent drop in volumes amid broader market declines as consumers increasingly turn to safer alternatives.
Growing sales: The owner of Golden Virginia and Rizla revealed that its net revenue from tobacco and next-generation products increased 2.8 percent in the six months ending in March.
Imperial’s revenue from next-generation products, such as vaping and nicotine pouches, increased 16.8 percent thanks to significant growth in Europe, Asia and Africa.
Turnover still fell 2.3 percent to £15.1 billion due to adverse currency fluctuations, while operating profits fell by £40 million to £1.49 billion.
However, the FTSE 100 company increased its market share in three of its five largest markets – the United States, Spain and Australia – and said it was “firmly on track” to hit its full-year guidance.
It anticipates net income to grow in the low single digits at constant currency levels and adjusted operating profits to be “near the middle” of its mid-single digit range.
Imperial also hopes to complete its £1.1bn share buyback programme, having already bought back £604m so far, and return at least £2.4bn to investors.
Stefan Bomhard, its chief executive, said: “Investment in consumer capabilities, more agile ways of working and further progress in our performance culture have made Imperial Brands a stronger company and capable of delivering acceleration in financial delivery. “.
Bomhard is leading a five-year strategy at Imperial focused on increasing market share in its core markets and developing non-tobacco products.
Demand for brands such as Pulze, Skruf and Blu is growing, but represents only a fraction of the Bristol-based group’s total sales.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “It is tobacco that continues to drive financial performance, with management balancing the delicate tightrope of asking smokers to pay more for their habit without collapsing. the demand”.
‘Modest growth targets for this year and next remain intact, but for the valuation to enjoy a substantial rerating, the launch of next-generation products needs to be accelerated.
“Progress is moving in the right direction, but turning the tide requires more investment and investors need to be aware of increasing regulatory scrutiny.”
Imperial Brands Stock They rose 2.9 per cent to 1,878.5p on Wednesday morning, making them one of the biggest risers on the FTSE 100 index.