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Imperial Brands Forecasts Return to Profit Growth This Year
Imperial Brands Forecasts Return to Profit Growth This Year
17 Nov 2020, 03:09 PM IST
(Bloomberg) -- Imperial Brands Plc forecast a return to profit growth this fiscal year as tobacco prices remain strong and its vaping business reduces its losses.
- Operating profit should rise at a low- to mid-single-digit percentage growth rate on an adjusted and organic basis in the 12 months through September 2021, the maker of West cigarettes said. Adjusted operating profit fell 4.8% in the most recent fiscal year, in line with analysts’ estimates.
Key Insights
- The ability to raise prices on tobacco is helping Imperial navigate the pandemic. The maker of Kool cigarettes raised prices by 6.7%, especially in the U.S., Australia, Germany and the U.K. Still, some shifts by smokers to cheaper products means the net impact was a 3.9% boost.
- The maker of Blu vaping products will need to find ways to revive sales of its cigarette alternatives -- seen broadly as key future growth drivers -- after revenue in that category slumped 27%, falling further behind larger competitors. Imperial managed to reduce the loss a bit in the second half, but reaching break-even will take more time.
- New Chief Executive Officer Stefan Bomhard is conducting a strategic review and plans to update investors on his plans to revive the tobacco and smoking substitute businesses on Jan. 27.
Market Reaction
- The shares fell 2% as of 8:01 a.m. London time Tuesday. They have gained 3.4% in the past month.
Get More
- See the details.
- Read the statement.
©2020 Bloomberg L.P.
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