Imperial Brands has announced that it will drop its 10 per cent dividend growth target from next year to focus on developing its e-cigarette portfolio and says it plans to buy back shares worth up to GBP 200 million (USD 251 million), Reuters reported.

The company said that it would increase its dividend payouts each year, but through a more liberal dividend policy that it would take business performance into account, according to the report.
Russ Mould, investment director at AJ Bell, said, “Imperial Brands’ shares are popular among retail investors for their generous pay-out.
“However, there had been growing concerns in the market that its rate of dividend growth was unsustainable if the company were to keep the rate of net debt to earnings at comfortable levels.
The company said the new dividend policy would allow investment in both organic growth and M&A opportunities in tobacco and vaping products and help it reduce debt, Reuters reported.
The company also announced that it is planning on selling its premium cigar business to get rid of assets worth GBP 2 billion by May 2020, the report said.