Imperial Brands Shares Edge Lower After Announcing Full-Year Results

Imperial Brands (LON: IMB) reported its full-year earnings ended 30 September on Tuesday, sending its shares around 1% lower at the open.

Citi recently anticipated Imperial Brands’ organic revenue to grow by 3.8%. Instead, the company posted revenue of £32.55 billion, down 0.7% from the prior year. However, net revenue increased by 1.5% to £7.79 billion.

Pre-tax profit declined to £2.55 billion from £3.24 billion. Adjusted profit before tax came in at £3.38 billion, compared to £3.16 billion the previous year, while adjusted earnings per share were 265.2p, above the 246.5p reported a year ago.

Meanwhile, operating profit rose 3.5% to £3.69 billion.

Stefan Bomhard, Chief Executive of Imperial Brands, said: “In line with our five-year strategy, increased investment and a more consumer-centric approach have improved delivery in both our priority combustible markets and our next generation product operations. At the same time, disciplined capital allocation has strengthened our balance sheet to reach our target leverage. This has enabled us to enhance shareholder returns through an ongoing share buyback programme alongside a progressive dividend.”

He added: “In NGP, successful consumer trials have validated our approach and we are now stepping up investment in new product and market launches across all three product categories. Our heated tobacco proposition, Pulze and iD, continued to perform well in our pilot markets of Czech Republic and Greece, and we have recently launched in Portugal, Hungary and Italy, the largest European market for this category.”

In line with its dividend policy, Imperial Brands announced an annual dividend per share of 141.17p, up 1.5%.

Looking forward, the company stated progress was strong and expects low single-digit constant currency net revenue growth. The growth rate of its adjusted operating profit is expected to improve within the mid-single-digit range over the three years. 

Adjusted operating profit is expected to be at a similar level to last year, at constant currency. At current rates, the company said foreign exchange translation is expected to be a 5-6% tailwind to net revenue, adjusted operating profit, and earnings per share.

While the company acknowledged the current macroeconomic uncertainty, noting pressure on consumer spending due to high inflation, it stated that it remains confident.

The group has seen significant growth in its share price this year, climbing over 23%. 

The company announced its multi-year share buyback program last month, repurchasing £1 billion in shares.

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