Shares in Imperial Brands (LON:IMB) have been subdued this morning even as the tobacco maker reaffirmed its full-year forecasts. The blue-chip group, however, expects a hit to its operating profit following the collapse of its UK distributor Palmer & Harvey.
As of 09:38 GMT, Imperial Brands’ share price had given up 0.42 percent to 2,718.00p, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.58 percent higher at 7,182.78 points. The group’s shares have lost more than 27 percent over the past year, as compared with a 0.15-percent dip in the Footsie.
Imperial reaffirms targets
Imperial Brands issued a statement ahead of its annual general meeting today, saying that it remained on track to meet its constant currency net revenue and earnings expectations for the full year, with delivery to be weighted toward the second half.
The group expects its constant currency net revenue growth for the full year to be in line with its medium-term guidance, reflecting growth in tobacco sales and the expansion of the company’s next generation products business. Imperial’s second-half net revenues are expected to be stronger due to improved price/mix in tobacco and an increasing contribution from e-vapour products.
Palmer & Harvey hit
Imperial reiterated today that its reported operating profit will be impacted by a write-off of up to around £160 million as a result of Palmer & Harvey entering administration last November. The group noted that due to the size and non-recurring nature of this write-off, it will be excluded from adjusted measures.
The tobacco maker expects its full-year adjusted operating profit, excluding the P&H write-off, to be weighted more to the second half than last year at constant currency.
Today’s update comes after Imperial Brands recently said that the changes to the US federal corporate tax rate were not expected to materially impact the group’s adjusted effective tax rate going forward.