Imperial Brands said it was on track to meet its full-year guidance and announced a £1.5bn share buyback for next year, continuing its heavy shareholder returns.
The company said it expected adjusted operating profit growth within its 3% to 5% target range for the year to 30 September, with high-single-digit earnings per share growth and free cash flow above £2.2bn.
Its tobacco business delivered a sixth consecutive year of net revenue growth, with price rises and market share gains in the US and Germany offsetting falling cigarette volumes.
Its next-generation products — vapes, heated tobacco and oral nicotine — grew revenue by double digits.
Having completed a £1.45bn buyback this year, Imperial announced a further £1.5bn programme for the coming year. This would have played a big part in shares rising 2% on Thursday
“Over the last six years Imperial Brands has delivered nearly £13 billion through dividends and buybacks and reduced the number of shares in issue by more than 21%,” explained Dan Coatsworth, head of markets at AJ Bell.
“This achievement, plus its defensive credentials, helped Imperial Brands shares to chalk up respectable gains over the period, though the stock has run out of puff in the past six months.
“The challenge facing tobacco companies is the decline in smoking in the West, driven by consumer habits and regulation, which is pressuring volumes. However, the company’s pricing power with those who still smoke has helped to keep revenues rising.”