Imperial Brands has announced its full year results for the year ended 30 September 2020 saying, “Tobacco volumes strong but sub-optimal product and market mix result in weak gross profit contribution”.

Financial performance summary:

• Group net revenue up +0.8%
• Tobacco volume decline of -2.1% reflecting better market size and share trends in several markets
• Tobacco net revenue +1.8% but weaker mix impacting gross profit contribution
• Moderation of NGP net revenue decline; H1: -43%, H2: -9% with FY down 27%
• Adjusted EPS down -5.6% reflecting reduced tobacco profit with COVID-19 and regulatory costs; and losses in NGP
• Reported EPS up 49.4% at 158.3p reflecting prior year impairment charge for Premium Cigar sale
• Strong cash conversion 127%; 107% excluding timing benefit on duty payments
• Annual dividend of 137.7 pence per share reflecting rebased payment announced in May

Chief Executive Stefan Bomhard said: “Although this has been a difficult year, the resilience of our tobacco business and the measures we have taken to improve our NGP operations reinforce my confidence in the future potential of the business. […] “My first months have been focused on engaging with employees, consumers and customers and leading the strategic review of the business. What I have seen to date confirms my view of the Group’s solid foundations. I believe there is scope to enhance returns from our tobacco business and opportunities to strengthen our NGP delivery over time. I firmly believe we can make a meaningful contribution to harm reduction within a more disciplined, returns focused framework and we have already taken steps to stem the NGP losses.”