6th Oct 2021 08:17
(Alliance News) - Imperial Brands PLC on Wednesday said it was on target to meet full-year guidance.
The tobacco firm expects net revenue for the year ended September 30 to grow by around 1% on an organic, constant currency basis, driven by continued strong pricing in tobacco.
Adjusted organic operating profit growth is expected to be in line with guidance of low to mid-single digit constant currency growth, reflecting "significantly reduced" losses in Next Generation Products - such as heated tobacco and vape offerings - and increased Distribution profit.
"The tobacco business has performed well although adjusted operating profit will be slightly lower than last year, as previously guided, as a result of the planned increased investment to support our strategic plan as well as lower stock revenue/profit in Australia (around GBP90 million) and US state litigation settlement costs (around GBP50 million)," Imperial explained.
Imperial highlighted progress made in implementing a new strategy, with greater investment in combustible tobacco products and new market trials in heated tobacco and vapour. Trials for its heated tobacco products in the Czech Republic and Greece were underway, as well as a trial for vapour product blu, in Charlotte, North Carolina.
A greater focus on its combustibles business ensured that long-term market share declines were ebbing and beginning to stabilise.
The effect of Covid-19 travel restrictions and changes in consumer buying patterns had been a small mix benefit, although this was beginning to reduce as restrictions are lifted and is likely to unwind further in the coming year, Imperial noted.
Shares in Imperial Brands were down 1.2% at 1,534.59 pence in London early Wednesday.
Annual results will be announced on November 16.
By Will Paige; [email protected]
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