Imperial in lift as price pain eases in Spain

IMPERIAL Tobacco said yesterday it expects sales to rise two per cent in the current year, with a damaging price war in Spain set to ease.

Imperial is market leader in Spain with a near 30 per cent share from brands like Fortuna, Ducados and Nobel, but suffered from a market depressed by economic woes and a 2011 ban on smoking in public places, which sparked a price war this year.

Analysts say the outlook for 2012 has improved in the Iberian region, Imperial’s third most profitable market after Britain and Germany, as all major tobacco players there have recently increased cigarette prices.

Imperial’s annual sales rise was in line with expectations and was unlikely to lead to any major changes to earnings forecasts, analysts said. The group said its performance in the year to 30 September remained in line with its expectations.

In July Imperial, which also makes Gauloises Blondes and JPS cigarettes, said the continued challenging economic environment in Spain is likely to hit full-year operating profit from the country by up to £70m, revised from previous forecasts of £110m.

The FTSE 100-listed company’s shares closed slightly up, outperforming the rest of the market.