Imperial Tobacco Group said today it remained on course to acquire a range of US cigarette brands as it reported a 1% fall in global revenue for the first nine months of the year.
Imperial saw a 1% fall in both tobacco volumes and net revenues (down to £4.75bn) in the nine months to 30 June. It blamed the political situations in Russia and Iraq for constraining revenues in those territories.
Imperial also warned the strength of the pound could impact full-year operating profits by 5% if exchange rates remained similar to current levels.
“Whilst conditions are still tough in a number of our markets, our footprint provides balance and we’re generating good results in growth markets, whilst demonstrating on-going resilience in our returns markets,” said chief executive Alison Cooper.
Imperial’s growth brands - including Lambert & Butler, Davidoff and Gauloises - saw a rise in volumes of 23% while revenues grew by 7% during the period.
Cooper added: “I’m pleased with the continued improvement in the quality of our sales growth. The work we are doing in prioritising our brand portfolio is reflected in the strong performance of our growth brands, which are consistently growing ahead of the market and gaining share. Brand migrations support our quality growth ambitions, and following the success of this year’s programme, we’re now implementing further migration initiatives.”
The company said it remained on track to complete its $7.1bn purchase of brands from merging US tobacco giants Reynolds American and Lorillard at some point in 2015. Imperial agreed to buy the Winston, Maverick, Kool and Salem cigarette brands and e-cigarette brand blu in July.
Cooper said: “Our proposed acquisition of US assets will make us a stronger competitor in a significant profit pool and key growth market, whilst the recent IPO of Logista forms part of our commitment to capital discipline; all focused on delivering sustainable returns for shareholders.”
Imperial’s US acquisitions will transform it into the third largest player in the US tobacco market.
The company’s shares were up 2% in morning trading in London to 2,577p.
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