Imperial Brands backs yearly view but warns war could hit demand

(Alliance News) - Imperial Brands PLC on Tuesday maintained its annual outlook, but the Middle East conflict has prompted a "more uncertain macroeconomic environment".

Shares in the company rose 0.8% to 2,750.00 pence each in London on Tuesday morning.

The owner of the Davidoff and Gauloises cigarette brands, as well as Rizla rolling paper and blu e-cigarettes said pretax profit in the half year to March 31 fell 39% to GBP791 million from GBP1.30 billion a year prior.

Revenue, however, rose 0.8% to GBP14.72 billion from GBP14.60 billion. Keeping a lid on profit, it was hurt by GBP210 million in strategy review programme costs and a GBP313 million hit from the settlement of historic legal cases.

"We have made a positive start to the execution of our evolved 2030 strategy, combining consistent operational and financial performance with tangible progress on our transformation," Chief Executive Lukas Paravicin said.

"In combustibles, robust pricing momentum has continued to deliver low single-digit growth, at constant currency, in both net revenue and adjusted operating profit. In next generation products we continue to grow market share in all three categories. We have seen particularly strong growth in heated tobacco, following the rollout of our Pulze 3.0 device. Our modern oral portfolio has grown strongly in European markets, while in the US we have grown volume share in a competitive market.

Despite the impact of one-offs our first half operational performance has driven consistent, strong cash flows, which underpin ongoing investment in growth initiatives and capital returns to shareholders."

Imperial Brands said it is on track with its GBP1.45 billion share buyback, and it has upped its interim dividend by 4.0% to 83.36 pence per share from 80.16p.

The firm said Tobacco & NGP net revenue rose 1.8% in the half-year to GBP3.73 billion from GBP3.66 billion. Adjusted operating profit from the units totalled GBP1.48 billion, down 0.5% from GBP1.49 billion. At constant currency, the net revenue figure was 1.8% higher and the adjusted operating profit measure increased 1.3%.

Tobacco volumes were down 1.5% on-year, amid declines in Europe and the Americas, but "robust pricing" supported net revenue and adjusted operating profit growth. In Next Generation Products, it is seeing "market share gains in all three categories and strong volume growth in all regions".

Looking ahead, it said: "While the conflict in the Middle East has resulted in a more uncertain macroeconomic environment, we have not seen a material impact to date. We will continue to monitor the situation. The longer this persists, the more likely there could be a more meaningful impact on input costs and consumer demand, including duty free. We remain focused on delivering full year results in line with our guidance.

"On a constant currency basis, we expect to deliver low-single-digit tobacco and double-digit NGP net revenue growth. Tobacco pricing will continue to more than offset cigarette volume declines and is expected to have more of a benefit in the second half. In NGP we expect a stronger second half, given the negative impact of one-offs in H1, plus new Zone flavour launches and targeted execution. Group adjusted operating profit is expected to grow in the 3% to 5% range, on a constant currency basis. Growth is expected to accelerate in the second half."

Adjusted operating profit in the year ended September 30 was GBP3.99 billion, with tobacco net revenue at GBP7.95 billion and NGP net revenue at GBP368 million.

By Eric Cunha, Alliance News news editor

Comments and questions to newsroom@alliancenews.com

Copyright 2026 Alliance News Ltd. All Rights Reserved.

Imperial Brands