17th May 2022 10:15
(Alliance News) - Imperial Brands PLC shares rose on Tuesday after the FTSE firm backed its prior guidance and reported that its core Combustible business is stabilising.
Shares were trading 6.9% higher at 1,831.50 pence each on Tuesday morning in London, making Imperial the best FTSE 100 performer.
In the six months that ended March 31, the Bristol-based tobacco firm reported a 27% fall in operating profit to GBP1.20 billion from GBP1.64 billion a year before.
Imperial explained that operating profit in the recent year suffered from GBP201 million in charges for its exit from Russia, while the year before benefited from a GBP281 million gain from the sale of its cigar business.
Pretax profit sunk 39% to GBP1.26 billion from GBP2.06 billion, while net revenue fell by 1.3% to GBP15.36 billion from GBP15.57 billion, which was blamed on lower excise duty in Europe.
"These results provide further evidence that we have achieved the stabilisation of our core Combustible business," Chief Executive Stefan Bomhard noted.
"During the first half of the year, we increased aggregate market share in the five priority markets [of the US, Germany, UK, Australia and Spain] which account for around 70% of our operating profit, while maintaining pricing discipline," he added.
Imperial Brands approved an interim dividend of 42.54 pence per share, reflecting a 1.0% increase from 42.12 pence per share a year ago.
Going forward, The FTSE 100 firm plans to focus on driving the performance of its Combustibles business in those five largest markets.
"Historically, we posted annual double-digit declines in aggregate share - making us the sector's largest share donor. In financial 2021, thanks to our renewed focus on the priority markets, that decline was stabilised. And during the first half of 2022, we recorded a 25 basis point increase in share while maintaining pricing discipline," the company said.
Imperial Brands said it is on track to deliver full-year results in line with guidance.
In November, it guided for net revenue growth at a similar level to financial 2021, at constant exchange rates, while adjusted operating profit is expected to grow slightly slower than net revenue, reflecting a step-up in investment.
Imperial Brands expects to deliver full-year net revenue growth of around 1% and adjusted operating profit growth of around 1%, at constant currency.
"We are now 18 months into our five-year strategy to build a more sustainable Imperial capable of consistent growth - and I am pleased with the progress we are making," CEO Bomhard continued.
"While these are uncertain times, as we move into 2023, we will have in place the capabilities and culture necessary to support the next phase of our strategy and deliver sustainable growth in shareholder value."
By Abby Amoakuh; [email protected]
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