POST Online Media Lite Edition


Imperial Brands sparks up interim dividend as investment pays off

Staff Writer |
Imperial Brands rolled another fat dividend for the first half of the year as earnings came out ahead of expectations despite continued tobacco volumes declines, a major increase in investment and growing debt pile.

Article continues below

While total volumes dropped 5.7% in the six months to 31 March, as they had across the whole of last year, versus an industry decline of 4.3%, tobacco net revenue grew 9.3% to £3.7bn at the reported level, or down 5.5% at constant currencies.

However, a significant increase in investment helped grow volumes in 'growth brands', which includes Davidoff, Gauloises, John Player Special and Winston 3.2% with a 60 basis point increase in market share.

Specialist brands, such as Gitanes, Cohiba cigars, Kool menthols, Drum rolling baccy, Rizla papers and Blu e-cigarettes, grew share as the size of the market declined, and along with the growth brands delivered a 200bps growth to represent 60.4% of group reported tobacco net revenue.

Total adjusted operating profits rose 6.3% to £1.7bn, adjusted profit before tax by 7.4% to £1.5bn and adjusted earnings per share by 7.9% to 121.9p.

On a reported basis, revenue rose 11.7% to £14.3bn and earnings per share by 133% to 70.7p, with the main difference with the adjusted figure being amortisation of acquired intangibles and restructuring costs.

The interim dividend was hiked 10% to 51.7p per share as the focus on capital discipline saw a 99.6% cash conversion rate.

Net debt would have been reduced by £1.2bn but for adverse currency moves of £1.4bn, meaning adjusted net debt rose to £13.9bn from £12.9bn at the last year end.

What to read next

Imperial Brands H1 profit decreased 66%
Imperial Tobacco Group revenue down 4%
Imperial Tobacco sales are down 5 percent