9th May 2018 09:58
LONDON (Alliance News) - Imperial Brands PLC on Wednesday said interim profit fell, though it continues to make "significant progress" in its next generation products and upped its dividend.
Shares in Imperial Brands were up 4.2% at 2,729.50 pence, making it the best performer in the FTSE 100 in early trade.
The tobacco giant reported a 7.6% decrease in operating profit to GBP833 million for the six months to March 31, compared to GBP902 million last year. Pretax profit fell to GBP600 million from GBP804 million a year before.
The company's first half revenue revenue fell slightly, declining 0.1% to GBP14.28 billion from GBP14.30 billion the year before.
Imperial declared an interim dividend of 56.87p per share, an increase of 10% from 51.70p last year.
Tobacco adjusted operating profit fell 3.2% on a constant currency basis, or 8.0% at actual rates, to GBP1.53 billion. Tobacco net revenue slipped 2.1% at constant currency, or 5.0% at actual rates, to GBP3.53 billion.
Imperial said it is increasing its investment in its next generation products this year, including e-vapour and heated nicotine, by GBP150 million. This is to support the launch of new products and "continue the progress we have been making on building our innovation pipeline".
Looking forward, the company expects a "considerably stronger" second half.
"We expect a stronger tobacco revenue performance in H2, particularly in Returns and Growth Markets, with more modest growth in the US," Imperial said.
Imperial also said it is "pleased" with its progress in its next generation products.
Chairman Mark Williamson said: "We are on track to deliver on our full year expectations. We are also making good progress delivering on our strategy, focusing on the key products, brands and markets central to delivering growth in Tobacco and Next Generation Products."
"This clear strategic focus supports active capital allocation, and we are progressing a number of divestment opportunities that will further simplify the business and free up capital," Williamson added.
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