Imperial Brands Share Discussion Threads

[jrphoenixw2] 15/5/2024 15:22

Looks like it spent about 5 months above 2k starting winter'22.
Then x-ref the longer term chart^ and the spike at end April'23. That was 26/4 and the close was exactly 2000p for one single day!
So agreed 2k will of course be a 'big round number' hurdle, but on the bright side it has crossed it and resided above before. I'm sure it'll test it this time, before retracing and reconsidering etc.

Given it opened the week at 1868p it's had a great run so far. Suspect it'll want a breather shortly, certainly Friday, 50/50 tomorrow.... until a fresh start next week? We'll see!

Tech indicators etc can be found here:

[montyhedge] 15/5/2024 15:13

It will, but doesn't it make Bats look good value.

[laurence llewelyn binliner] 15/5/2024 14:19

That will do very nicely, the 2000 share price is a big hurdle to cross, but it looks nailed on, and soon..:o)

[saltaire111] 15/5/2024 14:13

Just been looking through my purchase history relating to IMB. I bought £150k worth of IMB stock between Oct and November 2021. I sold £30k in June last year to move the money into BATS. Since my initial purchase, I’ve received £37.7k in dividends and the shares are currently showing an uncrystallised profit of £29k. So from my now net £120k investment, I have received back £66k.

From this data at deduce IMB is a solid value stock to hold!

Salty.

[marktime1231] 15/5/2024 11:56

A surprisingly strong reaction to results which in my mind are still not the "acceleration" of performance heralded for so long. An adjusted 2.something underlying profit improvement blown away by forex movements, or a 4% dividend increment. Meh! And I would have thought putting up prices nearly 9% to counter declining volumes is unlikely to be repeatable now roaring inflation has subsided.

Yes net debt ticking up, can't see a direct reference but my guess is that expensive parcel was redeemed by working capital eg from the credit facility.

And I don't get how eps is showing negative what with all the shares which have been taken out of circulation.

So what is cheering the market? Evidence that surplus free cash flow will continue, all being directed towards improved dividends and extended buybacks rather than debt reduction or capex. The prospect of NGPs contributing positively in future. The dividend now progressing meaningfully. Who knows. But, very welcome.

[philanderer] 15/5/2024 09:23

Excellent :-)

[saltaire111] 15/5/2024 08:51

Super reaction to good results.

[redbaron10] 15/5/2024 08:28

IMB still has pricing power with its recognised 'cheaper'brands of cigarettes compared to other big tobacco so that helps for healthy margins.Debt manageable and as you say tuftymatt a 4% divi rise.Nice and steady as she goes.

[tuftymatt] 15/5/2024 08:03

All sounds good to me and I like the 4% divi rise too from an already high yielder!!

Good luck all 👍🏻

[laurence llewelyn binliner] 15/5/2024 07:49

#Huckers, two times 22.45 pence dividend coming in.. :o)

[huckers] 15/5/2024 07:07

Net debt up a little to 10.085bn (9.799bn).


Reading on....

"Adjusted net debt £10.1bn; adjusted net debt to EBITDA on a 12-month basis broadly flat at 2.5x; reported net debt £10.6bn

On track to deliver adjusted net debt to EBITDA of around 2.0 times at the year end."



They've updated the debt summary on their site, showing the £600m @ 8.125% being retired. But no new issuance that I can see unless it is a work in progress or they are using a credit facility as a short term play (given they are saying net debt will drop from 2.5x to around 2.0x EBITDA by year end).

[huckers] 15/5/2024 07:06

BUSINESS HIGHLIGHTS

• Strong tobacco pricing up 8.6% more than offsetting volume declines

• Delivering stable aggregate market share in our five priority markets in line with our strategic objective

• Next Generation Product net revenue up 16.8% by building scale in our market footprint and product innovation

• Adjusted earnings per share benefited from adjusted operating profit growth and share count reduction

• Cash conversion was strong on 12-month basis supported by improved working capital

• Delivering the £1.1bn share buyback this year, alongside an increased interim dividend up 4.0%

• Continued confidence in successful delivery of full-year results in line with guidance, with returns improving in line with five-year strategy

[jrphoenixw2] 13/5/2024 12:42

Interim Results due Wednesday/15th.
I see at the same event last year the Q1+Q2 divs were announced.

[action] 05/5/2024 10:22

In loss though

[action] 05/5/2024 10:22

Waiting for 2200p to close my position after 2017...

[marktime1231] 02/5/2024 13:08

What does that mean? IMB can refinance its existing debt on similar terms and does not need to pay it down further than ebitda x 2, no pressure to further enhance its credit rating to lenders. Cash flow will not be channelled in that direction then.

Yes it would be good to know if IMB settled up that bond using undrawn debt facilities - anything costing less than base rate + 3% would have been an improvement - or has it issued new bonds to the market. Surely they would have announced the latter?

[huckers] 02/5/2024 12:52

Here is the link to the Fitch Rating Action Commentary:

www.fitchratings.com/research/corporate-finance/fitch-affirms-imperial-brands-at-bbb-outlook-stable-29-04-2024

This is the piece about their debt structure:

"Adequate Liquidity: At FYE23, IMB had GBP1.2 billion of unrestricted cash (as defined by Fitch) and undrawn committed revolving facilities of EUR3.1 billion available until September 2026, EUR184 million until March 2026 and EUR184 million until September 2025. This leads to an overall adequate liquidity cushion to meet short-term debt of GBP1.5 billion due in FY24.

Additionally, the company has access to GBP550 million of bilateral committed credit facilities maturing in September 2024. Most debt is composed of bonds issued by its wholly-owned Imperial Brands Finance PLC and guaranteed by IMB and by its UK operating subsidiary, Imperial Tobacco Ltd."


They haven't updated their debt summary on their investor site and I am still trying to find what they did with regards to the £600m @ 8.125% bond that matured in March.

[muscletrade] 30/4/2024 07:30

Fitch Maintains Imperial Brands' Ratings on Conservative Financial Structure, Low Regulatory Risk
April 30, 2024 at 06:10 am

(MT Newswires) -- Fitch Ratings on Monday affirmed its long-term issuer default and senior unsecured instrument ratings on Imperial Brands (IMB.L) at BBB, with a stable outlook.
The rating action is supported by the British tobacco company's focus on mature and highly regulated combustible tobacco markets, as well as its conservative financial structure that is in line with the lower band of its communicated leverage target.

It also reflects Imperial Brands' lower regulatory risk compared with peers following a decision to review its approach to next-generation

[marktime1231] 22/4/2024 13:13

Edged what?

The approx £1.5B net proceeds of BAT's disposal of an ITC stake being put to a buyback which will cut nearly 3% of stock spread over a two year programme.

vs

The second £550M tranche of IMBs ongoing buyback will remove another 3.5% of stock in just 6 months.

So in that ballgame IMB is smashing BAT out of the park.

In BATs favour it is yielding nearly 10% on its current depressed share price whereas IMB is "only" yielding 8%.

[montyhedge] 22/4/2024 08:23

Both good shares but Bats just edged it with the stake in ITC worth billions and buybacks until the end of 2025 if I remember rightly.

[valuehurts] 21/4/2024 08:45

We should make many multiples of our money with the current strategy and you are after a 40 percent pop? Private equity is private not a fund and they mostly do not care about ESG etc.. they use debt to buy companies on the cheap then use the companies underlying cash flows to pay off the debt used in the acquisition. This is why all tobacco companies use a lot of debt and will continue doing so

[action] 19/4/2024 15:00

This is doing better compare to BATS

[shareideas1] 11/4/2024 16:55

Yes they are in a post Covid super cycle having been bailed out through Covid...

[fenners66] 11/4/2024 16:32

You mean the profit would go up,debt down, dividends and share price up and some non ESG fund would come and offer us a 40 percent premiumm and possibly sack some of the directors?
Terrible if you are a director without a contractual massive pay off. Not bad for every shareholder whom also get the chance to reject it of course.

[valuehurts] 11/4/2024 12:29

Lol if imperial reduces debt it will be taken over and loaded with debt by PE. They will always hold quite a lot of debt. They won't reduce it much further than current levels.