Tobacco giant Imperial Brands beat profit expectations last year as growing demand for smoking alternatives and higher tobacco prices drove strong sales.
The owner of Davidoff and Golden Virginia reported a 4.6% rise in operating profit to £4.0bn in the year to 30 September as tobacco prices rose 5.7% to offset a 1.7% fall in demand.
Net revenue from tobacco and smoking alternatives - next-generation products (NGP) - grew 1.9% to £8.3bn, or 4.1% if swings in currency were ignored.
NGP’s net revenue was up 13.7%, with growth driven by oral nicotine in US and Europe.
Imperial Brands’ share price is trading at an eight-year high thanks to a five-year plan implemented by former CEO Stefan Bomhard in 2020.
While Bomhard retired in October, CFO Lukas Paravicini took the helm and quickly outlined a second five-year plan designed to keep cash and dividends flowing.
It today launched a £1.45bn share buyback and increased its dividend to 4.5%.
“Our consistently strong operational and financial delivery provides a firm platform on which to build as we embark on the next phase of our strategy,” said Paravicini.
“This transformation will enable us to fulfil our twin strategic priorities – sustainable value in combustibles and scale in NGP – and realise our purpose of forging a path to a healthier future for moments of relaxation and pleasure.”
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