Imperial Tobacco profits rise despite drooping cigarette sales

Clara Guibourg
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Imperial Tobacco's share price has soared 25 per cent since the start of the year (Source: Getty)

Cigarette sales are down for the FTSE-listed tobacco firm, despite an increase in growth for brands like Davidoff and Gauloises.

The figures

Imperial Tobacco reported full year profits of £3.05bn, up 2.4 per cent from £2.98bn last year.

Net sales of tobacco are down 2.6 per cent to £6.25bn, but volume of the company’s “growth brands” was up 10.7 per cent, and earnings per share rose 4.5 per cent to 212.5p.

Adjusted net debt was up 43 per cent to £11.65bn.

Imperial Tobacco’s shares are up nearly 25 per cent since the start of the year.

Why it’s interesting

Imperial Tobacco’s takeover of several cigarette brand from Reynolds American met with regulatory approval in May and the company reported “excellent progress” on its integration plans.

Although cigarette sales are drooping, Imperial’s growth brands, including Davidoff, Gauloises and JPS, are looking strong.

Imperial has been hurt by the ongoing conflict in Iraq and Syria - key growth markets for the tobacco firm - with lower volumes over the year.

But excluding these countries, the company reported “excellent” results from its growth markets, with underlying revenues up 4.5 per cent and operating profits up 27 per cent.

What they said

Alison Cooper, chief executive, said:

This was another successful year for Imperial in which we further strengthened the business and improved our quality of growth. We generated excellent results from our Growth Brands, outperforming the market with volume and share growth.

Our footprint was significantly enhanced by the US acquisition and the acquired brands performed well in the final quarter, maintaining share.

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