Imperial Brands sees NGP momentum drive steady H1

Imperial Brands reported continued momentum in next-generation products (NGP) in the first half, with mid-to-high single-digit net revenue growth expected, as it reiterated its full-year outlook and pointed to a second-half weighted performance.

In a trading update for the six months to 31 March 2026, the group said NGP growth is being driven by gains across all three categories, with particularly strong performances in Europe and the AAACE region, where double-digit growth is anticipated. Heated tobacco is benefiting from the rollout of Pulze 3.0, especially in Italy and Greece, while the blu vape kit range is continuing to perform well. In modern oral, recent launches under Skruf and Zone in the Nordics and UK are also supporting growth.

Overall, tobacco and NGP net revenue is expected to rise by a low-single-digit percentage in H1, supported by robust pricing in combustibles despite ongoing low single-digit volume declines. The business said it continues to balance market share and value, noting that while aggregate share across its top five markets has stabilised, a modest reduction is anticipated in H1 as it prioritises more profitable segments.

Group adjusted operating profit is forecast to be slightly higher year-on-year in the first half, with stronger performances in Europe and AAACE offsetting weaker contributions from the US, Australia and Logista. However, NGP adjusted operating losses are expected to increase moderately as investment continues to build scale in the category.

In the US, the Zone brand is maintaining volume share, although heightened promotional activity is expected to weigh on NGP net revenue versus the prior year. The company expects both tobacco and NGP performance to accelerate in the second half, supported by pricing already taken, planned increases, and new product activity including flavour launches for Zone and a targeted channel strategy.

Imperial Brands reiterated its full-year guidance, including low-single-digit tobacco growth, double-digit NGP net revenue growth, and three to five per cent growth in adjusted operating profit at constant currency. It also expects to deliver at least high-single-digit earnings per share growth and free cash flow of at least £2.2 billion.

Progress on shareholder returns continues, with £0.7bn of the planned £1.45bn share buyback for FY26 already completed by the end of March, forming part of its ongoing “evergreen” programme through to 2030.

The company said it has made a “good start” to its 2030 transformation strategy, highlighting steps towards becoming more consumer-centric and data-led, including a long-term partnership with Capgemini, supply chain initiatives and further rollout of enterprise IT systems.

While it flagged geopolitical uncertainty linked to the Middle East, there has been no material business impact to date, although the potential effect on the second half remains under review.

Interim results will be announced on 12 May.