Imperial Brands' tobacco revenue jumps 10%

Imperial Brands has posted a 10% jump in tobacco revenue for the first quarter, and said it is on track to meet full year expectations.

In a trading update for the three months to 31 December, the FTSE 100 company which was previously named Imperial Tobacco, said net tobacco revenue had risen from £1.49b to £1.63bn, supported by ITG Brands in the USA.

However total tobacco volumes had dropped 3%, due to the company deprioritising low quality volume in certain markets.

But Growth Brands volumes had risen by 0.4%, but when excluding Iraq and Syria jumped 7.3%, supported by investment in consumer initiatives and the company’s migration programme.

The company also warned that due to the devaluation of the Russian Rouble and a number of eastern Europe currencies, more significant currency headwinds are now expected, with a 3% impact on its full year earnings at current rates.

However Imperial Brands said it is on track to meet full year expectations as it focuses on strengthening the business and improving quality of growth.

Chief executive Alison Cooper said the company has made good progress against its strategic objectives.

“We are further sharpening our focus on quality revenue growth and have advanced the simplification of our portfolio and prioritisation of profitable volume.

“In the USA, the ITG Brands team has made excellent progress in the quarter successfully executing our retailer and wholesale programmes and establishing the foundations for a year of strong delivery."