Imperial Brands reiterates full-year outlook despite profits dip

The blue chip said reported revenues fell 2.3% in the six months to 31 March, to £15.1bn, while operating profits fell 2.6% to £1.5bn.

On a constant currency basis, however, adjusted profits rose 2.8% to £1.7bn.

The group, which makes both cigarettes and vapes, known internally as next generation products (NPG), said tobacco prices had risen by 8.6%, more than offsetting declining volumes.

NPG net revenues jumped 16.8%, boosted by "building scale in our market footprint and product innovation".

Stefan Bomhard, chief executive, said: "Investment in consumer capabilities, more agile ways of working and further progress with our performance culture have made Imperial Brands a stronger business, better able to deliver an acceleration in financial delivery.

"This is demonstrated in the first half, with the strongest organic top-line growth in more than ten years, amid a challenging external environment.

"Pricing actions in tobacco taken in the first half and good momentum in NGP gives us confidence in our ability to deliver full-year results in line with our guidance."

Imperial expects to deliver low single-digit constant currency tobacco and NGP net revenue growth this year, while growing constant currency adjusted operating profits "close to the middle of our mid-single digit range".

It continued: "Strong tobacco pricing already taken in the first half and lower NGP losses with will support a stronger second-half delivery."