Golden Virginia and Gauloises owner Imperial Brands is on track to achieve annual guidance, with first half profits set to come in higher than expected.
The FTSE 100 company anticipates net revenues from tobacco and ‘next-generation products’ to rise by low single-digit levels on a constant currency basis for the 12 months ending September.
Imperial said tobacco sales had been bolstered by price hikes and market share gains in priority markets like Spain, Australia, and the US, ‘broadly offsetting’ drops in the UK and Germany.
Development: Imperial Brands has invested considerable sums in developing non-tobacco alternatives as part of a five-year strategy launched in 2021
Meanwhile, demand for its vaping, heated tobacco and oral nicotine brands was supported by product launches, such as the new iSenzia non-tobacco heat stick.
Imperial also expects adjusted operating profits to increase by ‘close to the middle’ of its mid-single digit range, helped by lower losses in its NGP division.
The Bristol-based group has invested considerable sums in developing non-tobacco alternatives as part of a five-year strategy launched in 2021 under chief executive Stefan Bomhard.
So far, the company’s NGP brands, which include Pulze, Skruf and Blu, are present in the US and more than 20 European territories, although they provide a fraction of Imperial’s total turnover.
For the first half of the financial year, Imperial forecasts sales of these products to grow by a ‘mid-to-high teens’ percentage.
Over the same period, the firm believes operating profits will be ahead of the prior year, partly due to a strong result from its Spanish-based distribution business, Logista.
Imperial added that it had bought £604million of its own shares under its £1.1billion buyback programme, which the firm plans to complete ‘no later than’ 29 October.
Mark Crouch, a market analyst at eToro, said: ‘Generous shareholder returns have long been the focus of the Tobacco giant, in the form of share buybacks and a hefty dividend.’
But, he added: ‘Lingering doubts remain for an industry facing an uncertain future’.
Crouch said: ‘With the continued decline of tobacco smokers worldwide, multiple threats from government regulations and relentless health campaigns determined to phase out smoking, it’s easy to see why.’
A bill is going through the UK Parliament that, if passed, would ban anybody born after 2009 from buying cigarettes, which would be one of the world’s strictest anti-tobacco laws.
It would also introduce new restrictions on vaping goods, including vape flavours and how they are marketed and displayed in shops.
Imperial Brands shares were 0.3 per cent higher at £17.37 on late Tuesday morning, yet they have declined by around 30 per cent over the past five years.
