Rizla maker Imperial Brands reported battered profits this morning following the firm’s Russian market exit and pivot towards tobacco alternatives.
The cigarette giant revealed that adjusted revenue fell 2.1 per cent to £3.5bn and operating profit dropped £436m to £1.2bn.
Imperial Brands said this fall was driven by charges related to the exit from Russia and associated markets, but confirmed it remained on track to hit its full-year guidance.
The British firm is 18 months into its five-year strategy to build a “more sustainable Imperial capable of consistent growth”. Part of this strategy has been growing out “next generation products” (NGP), including its Pulze and iD heated tobacco proposition. Following “positive feedback”, the firm said it will now be rolling this out further to US and European markets.
Weighing in on the results, analyst at Third Bridge Ross Hindle, told City A.M.: “Unfortunately, Imperial trails its competitors in terms of NGP growth & success and while management suggests the Group remains on target to achieve its 5-year NGP ambition, the Group is expected to fall further behind the competition.”
Rival Philip Morris recently snapped up smokeless brand Swedish Match for £13bn.Rizla maker Imperial Brands saw adjusted revenue drop 2.1 per cent to £3.5bn, as the company continues to pivot towards tobacco alternatives across the world.