Imperial issues upbeat outlook, day after UK smoking curbs
October 5, 2023
British tobacco giant Imperial Brands on Thursday issued a bullish outlook and massive buyback of shares, one day after the UK government said it planned to hit the sector with stricter smoking curbs.
Imperial, which makes vaping brand blu and traditional cigarettes including Davidoff, Gauloises and Winston, said it remained on course for revenue and profit growth this year after hiking prices.
The news, alongside a £1.1-billion repurchase of shares, sent Imperial shares jumping 3.8 percent to £16.40 on London’s stock market, which was 0.5 percent higher in late morning deals.
“Strong tobacco pricing (is) driving… revenue and adjusted operating profit growth,” the group said in a trading update, noting also strength across next generation products including vaping.
Market share was expected to grow further in main markets Australia, Spain and the US, offsetting declines in Britain and Germany, it said.
“Political intervention will only add to its problems” in Britain, said Russ Mould, investment director at AJ Bell, after prime minister Rishi Sunak vowed to introduce measures that could eventually ban the legal sale of cigarettes.
Shares in Imperial and its rivals slid Wednesday after Sunak said there was “no safe level of smoking”.
He used a keynote speech at his Conservative party’s annual conference to propose raising “the smoking age by one year every year”.
“That means a 14-year-old today will never legally be sold a cigarette, and that they and their generation can grow up smoke-free,” Sunak added.
His Downing Street office later said the policy had the “potential to phase out smoking in young people almost completely as early as 2040”.
It follows similar tough measures introduced by New Zealand.
The UK government plans additional measures to restrict vaping, such as limiting the availability of disposable vapes and regulating flavours and packaging to reduce their appeal to children.
(AFP)
