6th May 2015 07:22
LONDON (Alliance News) - Imperial Tobacco Group PLC Wednesday reported lower operating profit for the first half of its financial year as total tobacco volume declined, partly due to reduced sales in Iraq, but its results improved excluding the impact of a stock optimisation programme it undertook last year, partly thanks to price increases and growth for its key brands.
The maker of brands including Davidoff, Gauloises and L&B reported an operating profit of GBP959 million for the six months to the end of March, down from GBP978 million a year earlier, as revenue declined to GBP12.13 billion from GBP12.63 billion on the back of a 1% decline in total tobacco volume to 138.2 billion.
The company optimised the amount of stock that its distributors were holding in 2014, weighing on its results in its last financial year. Excluding the impact from this optimisation, Imperial Tobacco said its adjusted operating profit rose to GBP1.37 billion from GBP1.35 billion, and adjusted earnings per share rose to 93.3 pence, from 89.6p.
It raised its interim dividend to 42.8p, from 38.8p.
Imperial Tobacco said growth brand volumes rose 17%, driven by particularly strong performances from Davidoff, JPS, West and Parker & Simpson. However, the overall portfolio saw volumes decline, despite improving market share.
"Underlying tobacco volumes were down 5%, held back by Iraq, where the deteriorating political and security situation has significantly impacted industry volumes. Excluding Iraq our underlying volumes were down 3%, 80 basis points better than the industry decline in our market footprint due to improving market share," the company said.
Imperial Tobacco shares were up 2.3% at 3,192.00 pence early Wednesday.
By Steve McGrath; [email protected]; @stevemcgrath1
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