Imperial Brands (IMB) celebrated the success of its portfolio of ‘next generation products’ (NGP). Vapour, heated tobacco and oral nicotine offer smokers alternatives to combustible tobacco, although Imperial prioritises the first of those three.
Over its first half, the group’s vaping brand ‘blu’ drove growth across the business and became increasingly established in Europe and Japan. Overall NGP revenues were up 245 per cent, registering £148m, although there was a slowdown in the US.
Looking to Imperial’s more conventional activities, tobacco volumes fell by 6.9 per cent, largely owing to shipment timings. Nevertheless, tobacco margins grew by 90 basis points and the shipment issues are expected to reverse in the second half. As part of a broad divestment programme, Imperial is progressing with its intention to sell its Premium Cigars business. The sale is expected to generate total proceeds of up to £2bn by May 2020.
Bloomberg consensus forecasts give full-year 2019 pre-tax profits of £3.4bn, rising to £3.6bn in 2020.
| IMPERIAL BRANDS (IMB) | ||||
| ORD PRICE: | 2,219p | MARKET VALUE: | £ 21.2bn | |
| TOUCH: | 2,218.5-2,219p | 12-MONTH HIGH: | 3,009p | LOW: 2,210p |
| DIVIDEND YIELD: | 8.7% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 514p* | NET DEBT: | 242% | |
| Half-year to 31 Mar | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 14.1 | 0.6 | 51.7 | 56.87 |
| 2019 | 14.4 | 1.1 | 71.2 | 62.56 |
| % change | +2 | +83 | +38 | +10 |
| Ex-div: | 23 May & 22 Aug** | |||
| Payment: | 28 Jun & 30 Sep** | |||
| *Includes intangible assets of £18.4bn, or 1,926p a share **Dividend paid in two equal instalments | ||||
