Imperial Brands share price: HY tobacco net revenue falls

Results in line with expectations with additional investment programme on track

Imperial Brands share price: HY tobacco net revenue falls

Imperial Brands (LON:IMB) has updated investors on its half-year performance this morning.

Highlights from the company statement:

Alison Cooper, Chief Executive, commented

"We're delivering encouraging improvements in share trends in many of our priority markets after significantly stepping up investment behind our strategy and quality growth. The volume and share gains we achieved with our Growth Brands in the period were particularly pleasing. Our performance is underpinned by the rollout of our Market Repeatable Model, which provides an effective and consistent approach for delivering sustainable quality growth in markets. We are deploying this model in e-vapour and believe it can also be successfully applied to drive growth in other consumer adjacencies. As expected, first half revenue and profit were impacted by the considerable increase in investment. In a challenging industry environment, we are delivering against our strategy and remain on track to meet full year earnings expectations at constant currency. Cash conversion remains strong and we are delivering another dividend increase of 10%."

Outlook

In November 2016, we announced a significant additional investment commitment in the current year to enhance our market position and drive further quality growth. These investments have already yielded improved trends in the first half and we expect these positive trends to continue, resulting in a stronger second half despite a further deterioration in industry volumes, combined with competitive pricing in a number of geographies.

Through a combination of our additional investment initiatives and an ongoing focus on cost optimisation, we expect constant currency earnings to be in line with expectations. Foreign exchange translation is expected to benefit earnings by around 9% based on current rates.

Our focus on capital discipline and cash flow management remains a core element of our strategy. Strong cash-flows will continue to be used for returns to shareholders, investing behind our business and paying down debt.

The positive progress we are making in driving our strategic agenda underpins our commitment to continue to generate value for our shareholders in 2017 and beyond.

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