8th May 2019 07:52
LONDON (Alliance News) - Imperial Brands PLC on Wednesday said profit rose sharply in the first half of its financial year due to reduced expenses and the growing strength of the company's Next Generation Products, such as e-cigarette brand Blu.
The tobacco company posted a pretax profit of GBP1.02 billion for the six months to March 31, a sharp 70% rise from GBP600 million a year before.
This increase resulted from higher revenue due to strong sales of Next Generation Products and a robust underlying performance from tobacco. This was combined with a 38% reduction in administrative and other expenses to GBP574 million from GBP919.
Administrative and other expenses included amortisation of acquired intangibles, which fell sharply to GBP297 million from GBP526 million, and a reduction in restructuring costs to GBP54 million from GBP105 million.
Revenue for the half was GBP14.39 billion, rising 2.3% from GBP14.06 billion year-on-year. Of this, Next Generation Product revenue amounted to GBP148 million, more than triple the GBP42 million achieved a year ago.
The company declared an interim dividend of 62.56 pence per share, 10% higher than the 56.87p per share declared for the same period of its 2018 financial year.
The company said its expectations for annual revenue, earnings, and cash generation are unchanged and it is on track to meet them.
Imperial Brands also said it expects to record revenue growth at or above the upper end of its 1% to 4% range, which it attributed to consistent tobacco growth and increased revenue from its Next Generation Products.
Imperial Brands Chief Executive Alison Cooper said: "This has been another half of pleasing underlying tobacco performance enhanced by the growing contribution of our [Next Generation Products] business, with overall revenues up 2.5%; and Europe and the Americas both growing revenue by 4%. In tobacco, we continue to focus on our longstanding brand and market priorities, and are delivering high margin sales growth.
"We have made significant progress in building our [Next Generation Products] business with investment behind myblu generating awareness and consumer adoption, resulting in leading retail shares in most markets. We are building on this momentum in the second half focused on further omnichannel expansion and new product initiatives. We have set the foundations for accelerated revenue growth and we are on track to meet our full year expectations."
The company also announced it has appointed Weir Group PLC CEO Jon Stanton as a non-executive director. He joins with immediate effects and will be a member of the audit committee as well as the succession & nominations committee.
Moreover, Imperial Brands Senior Independent Non-Executive Director Malcolm Wyman is stepping down "for personal reasons" and will be succeeded by Therese Esperdy, who joined the board in 2016.
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