Imperial on track as vaping continues growth spurt
Davidoff and Lambert & Butler maker Imperial Brands has said it is on track to meet full-year revenue and profit targets as it continues to invest in vaping products.
The tobacco giant said it expects net revenue growth at the upper end of its 1% to 4% range, and earnings per share growth within its 4% to 8% guidance.
Sales will be weighted to the second half and operating profit will reflect “continued underlying growth” in tobacco, but will by hit by a £100 million investment in blu, Imperial’s vaping brand.
Imperial said the product – part of its so-called next generation range – is performing well, with increased brand awareness driving “significant” year-on-year revenue growth.
This came despite what the firm described as “constraints due to market uncertainty” linked to the potential harm posed by e-cigarettes following statements by the US Food & Drug Administration.
The tobacco industry is focusing on smoking alternatives as an additional source of revenue as traditional cigarette consumption continues to fall.
Imperial has previously said that annual sales of vaping and smoking alternatives are on track to hit up to around £1.5 billion by 2020.
First-half earnings will also be affected by the reduction of its Logista stake other divestments, the firm added.
Imperial expects to glean up to £100 million of other gains in 2019.
Shares were flat at 2,571.5p in morning trade.