Tobacco group Imperial Brands Plc said on Wednesday it was on track to meet its full-year operating profit forecast, helped by higher cigarette prices and lower losses in its next-generation products business.
Overall tobacco volumes were in line with its estimates in the year ended 30 September, the Gauloises and West cigarettes maker said, although it expects adjusted operating profit at its tobacco business to be "slightly" slower than last year.
Profitability is being held back by factors including higher investments in its top five cigarette markets and higher excise costs in Australia.
Imperial shares, up 1.5% so far this year, were down 2% in morning trading. The FTSE 100 was down 1.3%.
Sluggish Sales
After years of sluggish sales and missteps related to its e-cigarettes business, chief executive Stefan Bomhard laid out a five-year turnaround plan in January that included focusing investments on its most profitable, top five cigarette markets and expanding sales of tobacco-heating products in Europe and e-cigarettes in the United States.
On Wednesday, he said the company had made good progress in implementing the strategy, even though it was seeing some of its long-term market share growth rates in the five markets "beginning to stabilize."
Organic Net Revenue
Group organic net revenue is expected to grow by around 1% at constant currencies.
Still, the company is on course to meet its forecast for low- to mid-single digit adjusted organic operating profit growth, in constant currencies.
That is due in part to "significantly" lower losses in its next generation products business, which is benefitting from pulling out of unprofitable markets and a sharper focus on high growth categories.
The company will report its final annual results on 16 November.
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