Imperial price hikes help to boost revenue

 
City A.M. Reporter
PRICE rises improved Imperial Tobacco’s full-year revenue and offset a dip in volumes, the world’s fourth-largest cigarette group said yesterday, as it suffered weakness in recession-hit countries.

The Bristol-based group, which sells over 340bn cigarettes annually of brands including Davidoff, Gauloises, JPS and West, said today revenue would rise around four per cent for its year to end-September when stripping out currency fluctuations.

Overall volumes were seen falling about three per cent.

Imperial aims to offer economy-brand cigarettes, such as JPS, Lambert & Butler and roll-your-own products while raising prices for more affluent consumers in western Europe and the US.

It said while growth was strong in eastern Europe, Africa, the Middle East, and its Asia Pacific region, volumes were hit by weakness in Poland, Spain and Ukraine. UN sanctions since mid-2011 have halted traded in Syria.

The company has suffered in Ukraine due to increased illicit trade in cigarettes without duty paid, while its business in Poland for hand-rolling tobacco was hit as farmers sold more tobacco directly.

It said operating performance and financial position were in line with its expectations. It gave a trading update towards the end of its financial year to 30 September and ahead of annual results set for 30 October.