5th Nov 2013 10:11
LONDON (Alliance News) - Imperial Tobacco PLC Tuesday reported higher profits for its financial year ended September 30, despite further sales volume and revenue declines in its key cigarette brands due to weak industry volumes in Europe and Russia.
The tobacco giant reported a pretax profit of GBP1.30 billion, compared with GBP1.08 billion a year earlier. It reported a net profit of GBP937 million for the year.
The company declared a final dividend of 81.2 pence per share, bringing the full year dividend to 116.4 pence per share, a 10% increase.
The group said that cost-saving initiatives helped deliver GBP30 million in savings for the year, and said it is on track for GBP300 million per annum by 2018.
It also said it expects to deliver incremental savings of around GBP60 million in the fiscal year 2014.
Imperial Tobacco reported a slight decline in revenue on a reported basis to GBP28.27 billion, down 1.1% when compared with GBP28.57 billion the prior year.
Total cigarette volumes, which includes cigarettes, fine cut tobacco, cigar and Swedish-product snus volumes, also fell 7.0%, to GBP317 billion, from GBP341 billion a year earlier.
Despite, the fall in sales volume and revenue, the group reported an operating profit of GBP1.96 billion for the year, an increase of 29% from the GBP1.52 billion achieved a year earlier.
Imperial Tobacco also said that due to continued economic weakness and duty increases in Spain, it incurred a further impairment of GBP580 million in the year from its Spanish intangible assets.
Growth brands - Davidoff, Gauloises Blondes, West and JPS - saw revenue increase 2%. They accounted for 41% of total volumes, an increase of 2 percentage points.
However industry volumes from its growth markets declined by 3% during the year, Imperial Tobacco said, largely due to significant market weakness in Russia, which suffered frm adverse regulatory and excise tax changes.
Imperial Tobacco said that markets in the US and Russia have remained challenging, although it saw a stronger performance in a number of different markets, including Taiwan, Turkey, Italy, Greece, Scandinavia, Cambodia and Kazakhstan.
Last month, the European Parliament set out its position on proposed measures intended to make smoking less attractive, particularly to young people. These measures include forcing tobacco firms such as Imperial Tobacco to cover 65% of their tobacco packages with graphic health warnings. There also would be restrictions on flavoured tobacco such as menthol, and regulation of e-cigarettes.
Shares in the Imperial Tobacco were up 2.6% Tuesday morning, trading at 2,371.00 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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