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UNITED KINGDOM

Imperial Brands is disappointed with interim results

20 May 2020. Imperial Brands published its Interim Results for the six months ended 31 March 2020, saying “While we delivered against our revised expectations, we are disappointed with these results”.

The UK-based tobacco company’s net revenue is down -0.9 per cent driven by declines in NGP offset by tobacco net revenue growth of 0.9 per cent. The adjusted operating profit is down -7.7 per cent and the tobacco adjusted operating profit down 0.7 per cent reflecting an increase in A&P in Europe driven by the timing of promotional activities and the phasing of overheads. Reported operating profit is down -19.6 per cent reflecting lower adjusted operating profit and a goodwill impairment and associated disposal costs of the Premium Cigar Division and higher restructuring costs, Imperial brands said in a press release.

“While we delivered against our revised expectations, we are disappointed with these results, and we remain fully focused on all opportunities to strengthen performance.

“We would like to thank our employees for their hard work and commitment in these challenging times. Their support has been outstanding and we continue to prioritise their health, safety and well-being.

“Our enhanced focus on tobacco has driven stronger in-market execution and an improved share performance, with gains in most of our priority markets. We have reduced our NGP spend following the poor returns on investment last year and this, together with recent weaknesses in the vapour category, has resulted in lower NGP revenue.

“Overall, COVID-19 has so far had only a small impact on trading but we expect this to be more pronounced in the second half due to continued pressures on our duty free and travel retail business, changes in consumption patterns including downtrading and a reversal of some first half inventory build,” Joint Interim Chief Executives Dominic Brisby and Joerg Biebernick said.