Imperial Brands Sees Higher Operating Profit Growth in Year Ahead -- Update

By Elena Vardon

Imperial Brands said it expects its adjusted operating profit for fiscal 2024 to be close to the middle of its mid-single digit range and its revenue to grow in the low-single digits.

The FTSE 100 tobacco group--which houses Davidoff, Gauloises and JPS among its brands--said Tuesday it sees its performance in the year ahead to be weighted to the second half on the phasing out of its pricing and investments in its next-generation products. It expects its first-half operating profit to grow at low-single digits at constant currency.

"Looking ahead, we expect the continuing benefits of our transformation to enable a further acceleration in our adjusted operating profit growth in the final two years of our five-year strategy," Chief Executive Stefan Bomhard said.

For fiscal 2023, the cigarette maker reported an adjusted operating profit--one of its preferred metrics--of GBP3.89 billion for the year ended Sept. 30--behind analyst expectations of GBP3.91 billion--which represents 3.8% on-year growth at constant currency. It had guided for growth at the lower end the of mid-single-digit range while consensus had seen 3.5% organic growth against the GBP3.69 billion reported for the year-prior period.

It said net revenue from tobacco and its next-generation products--which include vape, heated tobacco and oral nicotine products--was GBP8.01 billion, or 0.7% on-year growth at constant currency. The group had guided for low-single-digit organic growth while analysts polled in a company-compiled consensus had expected the figure to improve 1%, and to report GBP8.04 billion, from the previous year's GBP7.79 billion result.

Imperial Brands' tobacco volumes fell 10.4% due to its exit from Russia and weakness in the mass market for cigars in the U.S., which was offset by stronger pricing, it said. Next-generation products' net revenue rose 26.4%, it added.

The board declared a dividend 146.82 pence a share, compared with the previous year's 141.17 pence payout, while analysts had expected 145.1 pence a share return.

At 0833 GMT, shares were down 3.5 pence, or 0.2%, at 1,784.5 pence after opening slightly higher, while the wider FTSE 100 index edged down 0.1%.

Write to Elena Vardon at [e-mail]

(END) Dow Jones Newswires

November 14, 2023 03:52 ET (08:52 GMT)

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