Imperial offers share buyback as sales grow
IMPERIAL Tobacco, the world’s fourth-largest cigarette group, set a £500m share buyback yesterday and said it saw a return to sales growth as the company put last year’s problems behind it.
The British firm, which sells over 340bn cigarettes a year, reported that half-year earnings beat forecasts as it gained from the ending of a price war in Spain and the unwinding of de-stocking in the US and Ukraine.
Imperial, which makes Lambert & Butler, Davidoff and Fortuna cigarettes, said operating profits rose 4.4 per cent to £1.33bn in the six months to the end of March.
The half-year dividend increased 12.8 per cent to 31.7p a share.
Imperial saw a return to sales growth in the first three months of 2012. Revenues rose 1.9 per cent in the half-year to £13.96bn, compared to the end of last year when sanctions on Syria and price cuts in Spain hit turnover.
“Disciplined investments are supporting our sales ambitions and we’ll continue to maximise the many growth opportunities that our unique portfolio offers to create further value for our shareholders,” said chief executive Alison Cooper.
The £500m buyback follows a similar-sized scheme last year, when Imperial promised dividends would grow faster than earnings to push its payout to shareholders ratio to over 50 per cent. This followed an effort to pay down debts following its acquisition of Altadis in 2008.