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(Sharecast News) - Tobacco giant Imperial Brands reported a 4.8% improvement in first-half revenue on Tuesday, to £3.66bn, although adjusting for constant currency, its revenue decreased 1%.
The FTSE 100 company said operating profit was ahead 7.3% year-on-year in the six months ended 31 March at £1.72bn, and 0.8% firmer at constant exchange rates.
Earnings per share totalled 118.5p, indicating a 4.9% increase in actual terms, and a 1.7% decline at constant currency.
Net debt widened to £9.8bn, from the £9.16bn it recorded in the first half of 2022.
The board declared a dividend of 43.18p per share for the period, making for a 1.5% increase on both actual and constant currency terms.
On the operational front, Imperial Brands said pricing was "robust" in the period, as it saw a 20-basis point increase in its total market share across its top-five combustible market portfolio.
Net revenue from next-generation products (NGP) saw significant growth, rising 19.8%, which the board put down to successful product launches across various categories.
The firm's overall volumes were impacted by the unwinding of Covid-related effects and its exit from the Russian market last year, while higher investments in NGP also affected profitability.
Imperial Brands also noted a strong contribution from Logista, a recent merger and acquisition.
The directors affirmed that the company was progressing towards meeting its full-year guidance, expecting improving returns in line with its five-year strategy.
"We are now in the third year of our five-year strategy, and this means we are moving from the initial foundation-building phase to a period of improving financial delivery," said chief executive officer Stefan Bomhard.
"We remain strongly committed to an ongoing programme of shareholder returns and will complete our initial £1bn buyback during the second half.
"Business performance for the first half of fiscal year 2023 was resilient, despite temporarily increased volume declines against a strong comparator."
Bomhard said that as expected, that reflected a return to pre-Covid buying patterns, as well as the firm's decision to exit Russia last year.
"In tobacco, we have delivered further share gains in aggregate across our portfolio of top five markets, while also achieving strong pricing to help mitigate the volume declines.
"We have now recorded stable or growing aggregate market share in these markets in each of the last four six-month periods after many years of sharp declines.]
"In NGP, we have delivered a step-up in innovation with new product and market launches in all three categories: vapour, heated tobacco and modern oral."
That performance, Stefan Bomhard explained, was underpinned by targeted investments in capabilities and people.
"Earlier this month we opened a new innovation facility in Liverpool, which brings together consumers, product developers and third-party partners in a single collaborative space.
"We are making good progress in our programmes to modernise legacy systems, and we continue to invest in upskilling our leaders to drive forward our performance culture.
"We remain on track to deliver the acceleration in adjusted operating profit growth in the second half in line with our guidance and expectations."
At 0814 BST, shares in Imperial Brands were up 0.24% at 1,877.5p.
Reporting by Josh White for Sharecast.com.
