The company has announced that group net revenue is now expected to grow around 2 per cent to 30 September 2019 and earnings per share are now predicted to stay flat at constant currencies. Imperial Brands are blaming this drop in expectations on a difficult market for next generation products, such as vapes and e-cigarettes, in the USA and a change in predicted expectations for the Africa, Asia and Australasia division.
The difficult market is due to multiple regulation changes regarding vaping across the USA, as well as individual states bringing in their own laws and restrictions. According to the press release, “This has prompted a marked slowdown in the growth of the vapour category in recent weeks, with an increasing number of wholesalers and retailers not ordering or not allowing promotion of vaping products.” Imperial Brands are now expecting next generation product business to increase net revenue by 50 per cent, again an increase lower than previous expectations.
Tobacco business is continuing to see some success, as Imperial Brands have increased investment behind share in Australia, which should result in a stronger performance from the Africa, Asia and Australasia division in 2020.
According to the press release, in financial terms Imperial Brands “expect the results will benefit from c. USD 37m of other gains this year, compared with USD 98m last year.”