Tobacco giant Imperial Brands today said that it was on track to hit its full year targets after it increased its revenue in the first half of the year.
The FTSE 100 firm said that revenue was up 3.5 per cent at the half year at $15.6bn, driven by a 3.2 per cent in tobacco revenue and a 16.0 per cent in revenue from next-generation products.
The latter division, the firm said, which is made up of heated tobacco and vaping products, had benefitted from more focused investment.
Imperial Brands said that it had increased reported profit from £925m to £1.6bn, driven largely by the £281m proceeds from the sale of Premium Cigar Division.
Shareholders will receive a first half dividend of 42.12p, up from 41.70p last year.
The company, which makes Gauloises Blondes and Winston cigarettes, said it expected modest second half group, though it warned it was facing a £50m headwind due to a new Australian excise regime.
Chief executive Stefan Bomhard said: “We have made a good start in implementing our new strategy to transform Imperial and remain on track to meet full year expectations.
“In tobacco, we have put in place a clear market prioritisation to increase focus on our best opportunities for sustainable profit delivery.
“We have begun to stabilise the aggregate market share performance across our top five priority markets reflecting the changes we have made to tighten performance management and the good underlying momentum established over the past year.
“This is an encouraging start and one that I look forward to building on over time as we begin to step up investment in new strategic initiatives.”
Commenting on the figures, Steve Clayton, fund manager at Hargreaves Lansdown, which has a position in Imperial Brands said:
“Imperial are generating plenty of smoke, but still without any real fire. The numbers were solid enough, but despite the reported growth, the underlying performance of the tobacco business was actually a small decline in profitability.
“Imperial Brands have put a lot of time and energy in trying to regroup and remould themselves to create a viable path to growth. Now it is time to put the new strategy to the test.
“Focusing on the five top markets should boost efficiency of operation, and upcoming trials of new heated tobacco products could show the way forward for Imperial’s badly underperforming NGP division.”
Shares in the firm rose 2.0 per cent this morning.