Traditional tobacco products are facing increasing regulatory pressure, which has resulted in declining cigarette sales for tobacco groups in recent years. Yet Imperial Brands (IMB) has so far taken this in its stride. Management expects to report net revenue growth at the upper end or above the previously stated 1 to 4 per cent range for the first half of its financial year, with EPS growth expected to be between 4 and 8 per cent.
The focus is on the development of next-generation products, such as Imperial’s vapour brand blu, on which management spent £100m to drive brand awareness. This investment is expected to offset underlying growth in tobacco profits, where revenue growth was “modest”. Meanwhile, myblu is described as performing well with “significant” year-on-year revenue growth.
