Imperial Brands back FY guidance, hails good start to year

The tobacco company said its business is performing well and it remains on track to deliver full-year results in line with the guidance it gave at the annual results in November, with low-mid single digit organic adjusted operating profit growth at constant currency.

First-half net revenue is expected to grow by at least 1% on an organic, constant currency basis, driven by continued strong pricing in tobacco, as well as some benefit from growth in NGP (next generation product) revenues.

First-half group adjusted organic operating profit growth is expected to be least mid-single digit at constant currency, benefiting mainly from significantly reduced losses in NGP and increased profit in Logistics.

"Tobacco operating profit has been impacted by a lower duty windfall in Australia as previously guided and as we lap the impact of US trade inventories following the higher wholesaler purchases in March 2020 to meet Covid-19 pantry loading demand," it said.

Full-year adjusted group operating profit is expected to be in line with its guidance for low-mid single digit organic growth at constant currency.

"In tobacco, we have begun to achieve aggregate market share growth in our five priority markets with gains in US, UK and Spain more than offsetting declines in Germany and Australia," Imperial said. "We are investing behind the operational levers outlined at our January 2021 Capital Markets Day in each of these priority markets to drive performance improvements over time."

Imperial said overall tobacco volumes are in line with expectations, although the pandemic is still affecting consumer buying patterns.

In NGP, the company’s preparations for market trials in vapour and heated tobacco later this year are on track.