Imperial Tobacco profit rises despite challenging markets

Imperial Tobacco posted a rise in pre-tax profit and underlying tobacco net revenue for the year ended 30 September and said it was well placed to meet expectations for the coming year, despite a drop in overall revenues.

Pre-tax profit came in at £1.76m from £1.53m the previous, with tobacco net revenue up 3.1% to £6.25bn, but overall revenue fell to £25.28bn from £26.46bn. Imperial attributed the drop in revenue to challenging Syrian and Iraqi markets as well as currency headwinds.

“Results were affected by market size declines and by difficult trading caused by the conflict in Iraq and Syria,” the company said, adding that a strong price/mix and cost control initiatives mitigated these impacts.

Adjusted operating profit, meanwhile, rose to £3.05bn from £2.98bn and the company declared a total dividend of 141p per share, up 10% from last year.

Chief executive Alison Cooper said: "This was another successful year for Imperial in which we further strengthened the business and improved our quality of growth.

“We generated excellent results from our Growth Brands, outperforming the market with volume and share growth. Our footprint was significantly enhanced by the US acquisition and the acquired brands performed well in the final quarter, maintaining share.”

Imperial said it expects first quarter volumes will continue to reflect the situation in Iraq and Syria as well as a strong comparator quarter for volumes last year while first half revenue should benefit from stronger relative pricing.

“Overall, we are well placed to meet expectations for the coming year.”