Imperial Brands Maintains Forecast and Announces $1.3 Billion Share Buyback – Reuters

Imperial Brands reported on Thursday that its trading performance for the year met expectations and reaffirmed its forecasts, buoyed by consistent demand, increased prices, and a robust shift towards tobacco alternatives like e-cigarettes.

According to analyst Derren Nathan from Hargreaves Lansdown, this guidance is especially encouraging considering last year’s comparisons included operations in Russia, which are now suspended.

The company also revealed a share buyback program valued at £1.1 billion ($1.34 billion).

The producer of Winston cigarettes and blu vapes noted an improvement in net revenue growth for tobacco products during the second half of the year, crediting higher prices for mitigating a more significant decline in volume compared to historical averages.

Following this announcement, shares of the firm rose by 1.5% to 1,604.5 pence as they recovered from a lackluster first half. Nonetheless, the company has seen a decline of over 20% in share value this year, largely due to ongoing regulatory pressures. In contrast, competitor British American Tobacco has experienced a drop of more than 24%.

This update arrives just a day after the UK government proposed a ban on cigarette sales to younger generations, a initiative that could impose some of the strictest smoking regulations globally and potentially impact sales for major tobacco companies.

Should this legislation be enacted, the smoking age would incrementally increase each year, aiming to nearly eliminate smoking among youth by 2040, according to a government briefing paper.

In recent years, Imperial Brands has shifted its focus towards its top five markets and the expansion of next-generation products that are considered less harmful.

Richard Hunter, an analyst at Interactive Investor, noted that the company’s strong cash generation remains supported by growth in its overall market share within its key markets.