Imperial Brands on track to meet full-year expectations

Tobacco giant Imperial Brands said in a trading update on Tuesday that it remained on track to achieve its financial objectives while balancing share performance and implementing its strategic transformation plan.

The FTSE 100 company said strong tobacco pricing had been a significant support for financial delivery, while it maintained stable aggregate share in its top-five combustible markets.

It said it also showed resilience amidst geopolitical and macroeconomic pressures, with constant currency tobacco and ‘next-generation products’ (NGP) net revenue expected to grow at a low single-digit rate for the full year.

The firm’s NGP net revenue growth was expected to rise in the mid- to high-teens at constant currency, as Imperial expanded its NGP footprint, launching innovative products in multiple markets, including single-use formats under the blu brand and new iSenzia non-tobacco heat sticks.

In terms of financial performance, first-half adjusted group operating profit was ahead of the same period last year on a constant currency basis.

That, the board said, reflected higher tobacco and NGP adjusted operating profit, and growth at Logista, the company's distribution business.

Despite exchange rate fluctuations posing some challenges, Imperial said it was confident in meeting full-year expectations and delivering a step-up in adjusted operating profit growth.

The company's adjusted operating cash conversion remained strong, and was on track to deliver within its guidance for both the half and full year.

Imperial Brands said it was also making progress with its £1.1bn share buyback programme, having completed £604m of it as of 31 March.

At 0830 BST, Imperial Brands shares were down 0.38% at 1,725p.

Reporting by Josh White for Sharecast.com.