Imperial Brands shares lift after tobacco price increases

Imperial Brands said it was buoyed by higher tobacco prices over the past half year despite profits and revenues both falling.

The Golden Virginia manufacturer saw shares rise on Wednesday morning after it stressed it was on track to meet guidance for the year.

Stefan Bomhard, chief executive of the London-listed company, said it reported the “strongest organic top-line growth in more than ten years, amid a challenging external environment”.

Tobacco firms have come under pressure in recent years amid a broad decline in the use of traditional cigarettes, particularly in some of its largest western markets.

On Wednesday, the firm said it saw a 6.3% reduction in the volume of tobacco it sold over the six months to March 31, compared with the same period a year earlier.

It offset this with an 8.6% increase in tobacco prices for the period.

The firm’s next generation product (NGP) business, which includes heated tobacco and vape products, meanwhile reported another half-year of strong growth.

NGP net revenues grew by 16.8% for the period as it benefited from product innovation and strong growth in Europe.

Nevertheless, Imperial said total revenues fell by 2.3% to £15.06 billion as it was also knocked by current exchange rates.

Mr Bomhard added: “Investment in consumer capabilities, more agile ways of working and further progress with our performance culture have made Imperial Brands a stronger business better able to deliver an acceleration in financial delivery.

“Pricing actions in tobacco taken in the first half and good momentum in NGP gives us confidence in our ability to deliver full-year results in line with our guidance.”

Shares were 4.6% higher after early trading.