Proactive Investors - Cigarette maker Imperial Brands PLC (LON:IMB) reported first-half operating profits roughly in line with expectations as price rises and reduced losses from new technologies were offset by currency movements.
Underlying operating profit of £1.67 billion in the six months to 31 March, down 2.7% on a reported basis but rose 2.8% at constant currency rates. Analysts on average expected a £1.68 billion profit.
Revenues of £15.06 billion were down 2.3% as pricing increases of 8.6% more than offsetting a 6.3% tobacco volume decline.
Next-generation products (NGPs) like vaping and heat-not-burn saw an 16.8% increase in revenue as strong growth in Europe, Africa and Asia-Pacific more than offset declines in the US.
An interim dividend of 44.9p per share was declared, up 4%, with £604 million of share buybacks completed in period, as part of plans to buy back £1.1 billion this year.
On the outlook, management expressed confidence in delivering the promised improvement in adjusted operating profit growth to support a mid-single-digit constant currency growth rate.
The strong tobacco pricing in the first half and lower NGP losses are expected to support a stronger second half, with low-single-digit tobacco growth expected at constant currencies alongside NGP net revenue growth, while adjusted operating profit will be "close to the middle of our mid-single digit range," Imperial said.