Strong sales of e-cigarettes and heated tobacco in Europe have helped Imperial Brands to be back on track to meet its full-year goals, boosting its shares to a more than two-year high. This was reported today by Imperial Brands. It was also noted that the maker of Winston cigarettes and Backwoods cigars shares went up nearly 7% in morning trade.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said that Investors seemed reassured that the firm was back on track to hit its full-year guidance figures, as it proceeds in its five-year strategy to shift to tobacco alternatives
After years of redundancy and market share losses, Imperial CEO Stefan Bomhard laid out a turnaround plan in 2021 focused on its five top markets and expanding next-generation products (NGP) deemed not very harmful to health. Together, Spain, US, Britain, Germany, and Australia account for 70% and above of Imperial’s revenue. Imperial rival Philip Morris International’s $16 billion bid last week for smaller rival Swedish Match highlighted the urgency with which cigarette makers are trying to tap new and possibly with minimum risk alternatives.
Sales of Imperial’s next-generation brands, which include Pulse heated tobacco and blu e-cigarettes, were up 8.7% to £101m, driven by demand in Europe. In November, the company reported a reduction in losses in the business by more than 50%. Imperial also said the terms of its recent agreement to exit Russia did not include a clause allowing it to buy back its business there in the future, as Western companies are in haste to leave the country following its invasion of Ukraine.
Investors based in Russia were said to be buying Imperials business there, which contributed about 2% to annual net sales when combined with Ukraine. Imperial reported this highlight in April and also noted that during an earnings call executives said the transaction was closed and there was absolutely no clause of buyback in there.
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Net revenue of about £3.5 billion was adjusted up 0.3% in constant currencies, for the six months ended March 31. Earnings adjusted per share rose from 107pence to 113 pence per share last year.
