Tobacco giant Imperial Brands has said it is on track to deliver “a similar level” of profit and revenue as last year, despite the impact of its exit from Russia.
Bosses at the Bristol-headquartered company said it had produced a “resilient performance” in the first half of its current financial year, achieving a “stable” share in its five top markets, amid “robust” tobacco pricing. It added that it had stepped up the the rollout of its ‘next generation’ vaping products.
The board of the FTSE 100 firm - the maker of Gauloises and Davidoff cigarettes - said the trading was “in line” to meet its expectations of “low single-digit constant currency net revenue growth” in 2023, adding it expected operating profit growth to “accelerate” over the next three years. Last year Imperial Brands posted operating profits of £2.6bn - a 14.7% drop on 2021.
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This came after it sold off its Russian business to investors in the country last April, following the invasion of Ukraine, with the company estimating a non-cash write off of around £225m for the transaction at the time. In its latest update, the multinational group - one of the top five cigarette firms in the world - said during the first half of its last financial year its operations in Russia contributed net revenue of £54m and an adjusted operating profit of £7m.
The company said it has transferred the management of its Central and Eastern Europe cluster from its Europe division to its Africa, Asia and Australasia region, in order to focus on “driving value from our broader market portfolio”. Despite the Russian exit, and other headwinds such as increased investment in vaping products and the “continued unwind” of the Covid-19 pandemic, Imperial Brands said it was expecting “a stronger net revenue performance” in the second half, supported in part by price increases taken during the first half.
Meanwhile the business said it had completed £523m of a £1bn share buyback programme for this year. The company said it would publish its interim results for the six months to the end of March on May 16.
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