Imperial has announced it is continuing to make good progress implementing its five-year strategy to transform the business and is confident to deliver the full-year accelerated adjusted operating profit growth in line with its previously stated medium-term guidance.
For the full-year, on a constant currency basis, tobacco and NGP net revenue is expected to grow at a low single-digit rate, with Group adjusted operating profit growing at a rate close to the middle of our mid-single digit range. “This performance reflects our improved resilience to withstand geopolitical and macro-economic pressures as well as the benefit of our continued investment to strengthen performance and drive transformation,” Imperial said in a press release.
Constant currency tobacco and NGP net revenue growth has strengthened over the same period last year underpinned by strong combustibles pricing and growth in Imperial’s NGP business. In combustibles, focused investment in its five priority markets continues to support resilient aggregate market share with gains in the US, Spain and Australia, broadly offsetting declines in Germany and the UK, as expected. “These results are consistent with our medium-term objective to hold or grow aggregate share across these markets. At the same time, we have delivered strong pricing, more than offsetting wider industry volume pressures in certain markets.”
NGP first half net revenues are expected to grow in the mid- to high-teens at constant currency, as Imperial builds scale in its existing footprint. “We are now present in more than 20 European markets and the US, and, in the first half, we launched innovative products in all three categories. These included new single-use formats under the blu brand, new iSenzia non-tobacco heat sticks, and entry in the US oral nicotine category with the Zone range of pouches.”
As previously guided, growth in first-half Group adjusted operating profit is expected to be at low single digits on a constant currency basis, reflecting the anticipated second-half weighting of performance. In the first-half, constant currency tobacco adjusted operating profit will be ahead of last year with good performances in Europe and Americas more than offsetting a softer performance in the AAACE region, which benefited from a very strong comparator period.
At current exchange rates, translation foreign exchange is expected to be a c. 5 per cent headwind on first-half adjusted operating profit and a c. 3.5 per cent headwind on full-year adjusted operating profit.
“At 31 March 2024, we had completed GBP 604m of our GBP 1.1bn share buyback for this year, representing approximately 3.7 per cent of the share capital as at 1 October 2023. The buyback is on track to complete no later than 29 October. We remain committed to delivering a material reduction in the share capital base over time. This buyback programme represents an ongoing source of shareholder returns alongside our progressive dividend policy.”