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Imperial Brands steps in to rescue wholesaler

The tobacco company said it has been working with other stakeholders to create a future for the debt-laden wholesaler
September 28, 2017

Imperial Brands (IMB) has confirmed that is it involved with the rescue plan for Palmer & Harvey, the UK’s biggest cigarette wholesaler. A representative from Imperial said Palmer & Harvey was “very important to us” as they are a key distributor of cigarettes to major supermarkets, corner stores, and petrol stations. Palmer & Harvey will have to do something about its mounting debt by Saturday, at which point payments on a number of its credit lines come due.

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Elsewhere, Imperial has been focusing on its “market repeatable model” in the tobacco division, or how to prompt its customers to keep buying cigarettes. Tactics include encouraging smokers to transition to buying premium brands while still applying pricing that is competitive in the given market, along with making sure their cigarette brands can be purchased everywhere so that users aren’t tempted to go to a competitor.

These efforts are meant to help the company gain market share across its various geographies. Management reassured shareholders that the added costs from increased investment has been offset by cost cutting, restructuring the pension programme, and ongoing efficiencies, so spending won’t come at the cost of earnings.

No mention was made explicitly about the FDA’s plans to cut the amount of nicotine allowed in cigarettes sold in the US, but Imperial is continuing its push into non-combustible alternatives. New launches of next generation products are planned for the coming year. These aim to improve the customer experience and extend the blu range of vaporisers.