Imperial Brands on track for full year as H1 profits, revenue rise

Imperial Brands said on Tuesday that it was on track to deliver full-year results in line with guidance as it reported a jump in first-half profit and revenue.

In the six months to the end of March, pre-tax profit rose to £2.06bn from £785m in the same period a year ago, with revenue up 6.1% to £15.6bn.

Organic net revenue was up 3.5%, driven by tobacco growth of 3.2% and next generation product net revenue up 16%. Imperial said Covid-19 related changes to consumer buying patterns has continued to be a net benefit to revenue.

Adjusted operating income in the tobacco segment fell 3.4% at constant currency to £56m, due to lower US trade inventories, "reflecting the phasing of purchases in March 2020 to support consumer demand", and lower stock profit in Australia, as previously guided. The company also pointed to a £42m charge to meet US state litigation costs.

The dividend was lifted by 1% to 42.12p a share. Imperial said it had made a good start to the year and although the pandemic continues to affect aspects of the business, its full-year guidance remains unchanged for low-mid single digit organic adjusted operating profit growth at constant currency.

Chief executive Stefan Bomhard said: "We have made a good start in implementing our new strategy to transform Imperial and remain on track to meet full year expectations.

"In tobacco, we have put in place a clear market prioritisation to increase focus on our best opportunities for sustainable profit delivery. We have begun to stabilise the aggregate market share performance across our top five priority markets reflecting the changes we have made to tighten performance management and the good underlying momentum established over the past year. This is an encouraging start and one that I look forward to building on over time as we begin to step up investment in new strategic initiatives."