Imperial Brands Share Discussion Threads

[huckers] 25/1/2024 15:04

They have reduced debt in recent years. There is a £600m bond maturing on the 15 March at an 8.13% coupon (the most expensive debt they have issued). Interesting to see what happens when it is rolled over/retired.

At the current share price I think I favour retiring debt over buybacks. When the share price was 200-300p lower it made more sense on a cost of capital basis to buy back shares and reduce the consequent dividend cost.

[laurence llewelyn binliner] 25/1/2024 15:01

#Fenners66, I would prefer debt reduction too, something that is tangible and can be seen to add value by reducing the debt per share..

But we are here for the ride, not the decision making.. :o)

[fenners66] 25/1/2024 13:18

Unless some who can move the share price believe that having the cash / moreover cutting the debt is more important.

[laurence llewelyn binliner] 25/1/2024 10:17

#Fenners66, buybacks are not a guarantee the share price will rise as 2023 demonstrated here, but they can workout for some companies (TSCO) for example have had a great run from 240-300 pence over 2023 and +20%..

But over time as we bought back GBP1BN in 2023, and another 1.1BN planned for 2024, it is hard to see that as being a drag on the share price . :o)

[fenners66] 25/1/2024 10:03

just shows that buybacks are not the share price panacea that some think

[laurence llewelyn binliner] 25/1/2024 09:53

January 2023 was around 2200, since then we have had a FY of buybacks and with the FY2024 buyback to come, so 2500 would be a start for fair value.. :o)

[luderitz] 25/1/2024 09:45

I do hope so as this hanging around 20 is about 10 quid short of what I want.

[laurence llewelyn binliner] 24/1/2024 18:36

1900 in, next stop 2000 as the buybacks continue.. :o)

[dmore2] 24/1/2024 18:23

RNS is wrong
The figure of 881,496,895 may be used by shareholders

yesterday was lower figure






Date of transaction: 23 January 2024

Average price paid per share: GBp 1,896.24

Lowest price paid per share: GBp 1,884.50

Highest price paid per share: GBp 1,911.00

Broker: Morgan Stanley & Co. International Plc ("Morgan Stanley")

The Company intends to cancel these Shares.

All shares were purchased from Morgan Stanley as an on exchange transaction subject to the rules of the London Stock Exchange.

Following the purchase and subsequent settlement and cancellation of these shares, the remaining number of ordinary shares in issue will be 879,549,828 (excluding treasury shares).

The figure of 879,549,828 may be used by shareholders (and others with notification obligations) as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the Disclosure Guidance and Transparency Rules.

[philanderer] 24/1/2024 10:00

UBS cuts Imperial Brands price target to 2,260 (2,480) pence - 'buy'

[spud] 23/1/2024 15:59

Lol - The story for IMB hasn't changed one iota since they rang it up as a buy. There's only one fast way to lose money (aside from putting a match to it) and that's by following newspaper share tips. spud

[philanderer] 23/1/2024 13:43

The Telegraph

'These stocks will never light up your portfolio again'

Time to stub out both names. Sell.

Questor says: sell

Tickers: BATS, IMB

Share prices at close: £23.35, £18.88

[albert arthur] 19/1/2024 09:35

I see the yield is just shy of 8%

[tuftymatt] 19/1/2024 09:16

Good luck with that Albert.

Now we need to hold the 1900, especially into the weekend, which should then support a run at 2000 as we head towards ex divi.

Good luck all 👍🏻

[albert arthur] 19/1/2024 08:35

Taken a long here for the divi trade, ex divi 15th Feb.

[jrphoenixw2] 15/1/2024 18:11

LLB, 'You might also enjoy...'

[laurence llewelyn binliner] 15/1/2024 15:07

Nice to see 1900 breached, from a TA looking back at the chart trend line and support from September 2020, the share price is pretty much doing what you would expect to see..

Next stop 2000.. :o)

[18bt] 15/1/2024 13:15

If you want a really good policy on buybacks and whether companies should use them or special dividends, have a look at Next's policy. It broadly has a formula for determining whether it's shares are over or undervalued and at one point extra debt affects its credit rating. I wish more companies would do something similar. You wouldn't complain about the next share price is you were a long term holder.

[fenners66] 15/1/2024 13:03

anhar LLB sensible posts.

What grates are the posts from those that "believe" hook line and sinker that BB's will increase the share price (long term not on the day).

Unfortunately boards have swallowed that as well , so either they are just as "believing" or as we suspect are more likely to have a motive based upon their bonus calculations , buried in the rules we never see, whether its as simple as EPS or perhaps a more complex ROCE or other calc. Alternatively they are just beholden to their "major" shareholders , the institutions that crave liquidity so they can sell when they want to a buyer of last resort , with perhaps thoughts along the lines of "you tow the line, and we will not reconsider your position ..."

[laurence llewelyn binliner] 15/1/2024 11:35

#anhar, I am not a fan of buy backs on the whole, I would much prefer to see debt reduction and a progressive dividend policy, but you correctly point out they are all at it now so we have inherited a plethora of portfolio buybacks and have to run with their strategies, I would not add because of a buyback incoming, and would be reluctant to sell any off because of the same so they are all a hold, if there is a CG to be had provided those shares are cancelled and not held in treasury so be it..

IMB dropped from 2070-1800 over 2023 while the BB was ongoing, 2024 will see another GBP1.1BN bought back so we will have to see the results of this at FY24..

I am predominantly a dividend investor, so hold IMB/BATS to have jam on both sides of my slice of toast, if there is any MnA consolidation in the industry over time I would not be at all surprised..

[shareideas1] 15/1/2024 11:12

If the company buys back 10% they would have an equal and offsetting reduction in their cash balance so the equity value decreases to reflect the higher debt in the EV... The "value creation" from the SBB comes from the earnings accretion of buying back shares which is a function of the cost of equity versus the (post tax) cost of debt!In IMBs case the buyback is earnings/growth accretive to the tune of L-MSD% each year which is very helpful but not massively material in the context of all the other moving parts (not least FX moves and regulatory changes)!

[anhar] 15/1/2024 10:47

LLB: ...indeed, if the company buy back 10% of the share capital, you would expect the share price to rise 10%...

There is no such direct relationship between BBs and the share price You might expect it but you will be disappointed unless sheer blind luck runs your way. I've been a long term income investor mostly in big caps for decades and have observed many of my shares mounting BBs. It's become an epidemic as they're nearly all at it, but there is no clear effect on prices at all. Some rise, some fall, some go nowhere, same as they do without any BB.

I've long concluded from experience that BBs do not affect SPs. It's a naive small investor belief that they do, witness the misplaced joy often voiced around here when a company announces a BB in the false hope that it will drive up the share price Short term share prices overwhelmingly fluctuate randomly. Consequently to try and score a capital gain by betting on a BB cannot be a winning strategy over a number of attempts.

[tuftymatt] 15/1/2024 09:45

A positive start to the trading week and now the question is can we close above 1900?

Let's hope so as it will encourage others in I think with a view of 2000 before too long.

Good luck all 👍🏻

[laurence llewelyn binliner] 15/1/2024 09:41

#acasatix, indeed, if the company buy back 10% of the share capital, you would expect the share price to rise 10% along with the EPS/DPS doing the same with the MCAP remaining flat(ish).. IF BATS have got it right and the market buys their strategy to work towards 50% revenues from smokeless by 2035, we could see their share price recover the -25% loss from 2023 over 2024/5 and their MCAP rise accordingly so the relative gap could widen..

At some point in time there could be an opportunity to combine resources and enjoy the economies of scale, if/when that might happen is what holders can position for in advance, if it does not happen then we can simply mop up the dividends and watch the buybacks continue.. :o)