Imperial Brands’ share price is smokin’ as cigarette alternatives take off
Shares were on the rise at Imperial Brands this morning, as the cigarette manufacturer painted a positive outlook and reported "significant progress" in its next-generation products.
Alison Cooper, the business's chief executive, also revealed that Imperial would be looking to sell off certain divisions to raise £2bn within the next year to two years.
She said the business, which has been struggling to convince investors of its worth in recent months, would sharpen its focus on key products and use the cash to pay down debt, deliver returns to shareholders and invest growth.
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“The market had put Imperial Brands in the dog house until recently, largely due to its perceived lack of heat-not-burn alternative tobacco products," said Hargreaves Lansdown fund manager Steve Clayton.
"With the Blu e-vapour range performing strongly, heat-not-burn products now in late-stage development and signs of improvement in the core tobacco performance, Imperial is finding support once more."
Though Imperial's tobacco net revenue fell by 2.1 per cent in the first half of the year to £3.5bn, with earnings per share down one per cent to 114.3p thanks to a "foreign exchange headwind", it raised its dividend by 10 per cent.
Read more: Imperial Brands is expected to reassure the market with new next generation products
Imperial said its total volumes continued to outperform the industry, though it added that its adjusted results reflected a "difficult prior year trading environment" which was improving in the second quarter.
In terms of its "next generation" products, Imperial said it was getting positive feedback about the Blu range and would soon launch nicotine salt pods, which can be used in vapes.
Meanwhile it said there were second stage consumer trials planned "in the next few months" for its heat-not-burn tobacco products.
Imperial's tobacco "growth brands", which include cigarette names such as Winston and Lambert & Butler, saw sales volumes rise by 6.3 per cent.
Read more: Imperial Brands announces push on next generation products after volumes of cigarettes decline
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