Imperial Brands share price down 4% as tobacco volumes slide in H1

The British multinational tobacco company saw its share price take a tumble on Wednesday after its half-year results showed tobacco volumes had fallen and a slowdown in US vaping.

Imperial Brands Source: Bloomberg

Imperial Brands saw tobacco volumes slid 6.9% in its first six months of trading, exceeding industry volumes which were down 4.5%, with the company blamed on short-term shipment timings.

The news helped send the company’s share price lower on Wednesday, with the stock falling 5% to £22.09 a share as of 11:55am GMT.

‘In tobacco, we continue to focus on our longstanding brand and market priorities, and are delivering high margin sales growth,’ Imperial Brands CEO Alison Cooper said.

Imperial Brands results: key figures

Imperial Brands’ net revenue rose 2.5%, driven by strong next generation products (NGP) growth and a good underlying tobacco performance, the company said.

NGP revenues of £148m, representing a 245% increase, with growth in Europe, the US and Japan.

Tobacco products benefitted from a strong price/mix despite volumes being impacted by shipment timings, with growth driven by the Americas and Europe.

Adjusted operating profit reflects additional £94m gross NGP investment & £40m profit on OTP disposal last year.

The company also proposed 10% increase to its half-year dividend to 62.56p. Meanwhile, its full-year guidance remained unchanged, for EPS growth at the low end of the medium-term target of 4-8%.

US vaping slowdown hurts Imperial Brands growth goals

Imperial Brands has seen strong growth across its NGPs, particularly its new vaping product, myblu, which has made significant progress.

‘We have made significant progress in building our NGP business with investment behind myblu generating awareness and consumer adoption, resulting in leading retail shares in most markets,’ Cooper added.

However, there has been a significant slowdown in the US market that has hinder the company’s growth in vaping products, after regulators clamped down on the product after data showed that vaping had increased 78% among high school students and 50% among middle school children.

‘This has been another half of pleasing underlying tobacco performance enhanced by the growing contribution of our NGP business, with overall revenues up 2.5 per cent; and Europe and the Americas both growing revenue by 4%,’ Cooper said.


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