Rising tobacco prices helped push UK tobacco giant Imperial Brands’ revenue up, even as the number of cigarettes sold continues to drop.
The firm, which rebranded earlier this month, dropping “tobacco” from its name, blamed the dropping amount of tobacco it sold in the quarter ending 31 December 2015 on turmoil in the Middle East.
Volumes fell by three per cent, with Iraq and Syria accounting for a 4.4 per cent drop.
Even so, revenues soared by 16.6 per cent, supported by increasing prices.
Tobacco consumption in the west is dropping, and the group has pushed out a cost cutting programme to offset the hit from this, planning to cut £300m by 2018, with £55m slashed in the first year.
Chief executive Alison Cooper said Imperial Brands was on track to deliver a full-year dividend growth of at least 10 per cent:
“We continued to make good progress against our strategic objectives in the first quarter and are well placed to meet full year expectations,” she said, adding:
We are further sharpening our focus on quality revenue growth and have advanced the simplification of our portfolio and prioritisation of profitable volume.
Imperial went on a US shopping spree last year, buying brands from Reynolds for $7.1bn. These have seen strong growth, and excluding these, the group’s volume is down 9.1 per cent.