Imperial Brands shares rose on Tuesday after the group announced it is on track to meet its full-year guidance for FY25, driven by solid growth in both tobacco and next-generation products (NGP).
Shares were 2% higher after announcing results and a £1.45bn share buyback program for FY26.
The tobacco giant expects market share gains in the US, Germany, and Australia to broadly offset declines in Spain and the UK. This balanced performance across key markets demonstrates the company’s resilient global positioning.
Imperial Brands anticipates another year of double-digit Next Generation Product (NGP) net revenue growth, with the full-year figure expected around the mid-point of a 12-14% range.
Next-generation products, such as vapes and other tobacco alternatives, are clearly the future for Imperial Brands, and continued growth will likely encourage investors.
Group adjusted operating profit growth is projected at a similar rate to last year, aligning with previous guidance.
“Investors in tobacco giant Imperial Brands won’t need to inhale too deeply after digesting today’s full year trading update,” said Derren Nathan, head of equity research, Hargreaves Lansdown.
“The company behind the likes of Rizla, Golden Virginia and blu vapes is set to deliver results in line with guidance. That translates to low single-digit growth in underlying revenue and mid-single digit growth in underlying operating profit, implying a step up in margins over the second half of the year.”
FY25 marks the final year of Imperial Brands’ 2021 strategy, with the company positioning itself strongly for the next phase through 2030. The transformation focuses on becoming a more consumer-centric, focused, and agile challenger business.
Constant currency tobacco and NGP net revenue growth has been underpinned by strong combustible pricing and continued double-digit NGP business expansion. Volume declines have eased across most markets.
As part of its 2030 strategy to build a simpler, more efficient organisation, Imperial Brands has initiated consultation regarding its Langenhagen, Germany, factory. The process will result in either a third-party sale or closure of the facility.
Share buybacks are always welcomed by the market, and the announced £1.45bn FY26 share buyback will go a long way to offsetting concerns about falling combustible sales.