LONDON (ShareCast) - (Sharecast News) - Cigarette maker Imperial Brands said full-year sales were likely to be stronger than it expected, but that tobacco sales had fallen in the first half and profits would be held back by increased investment in 'next generation' products.
Group net revenue growth for the year to next September is now expected to be at or above the upper end of its 1-4% revenue growth range management had previously guided, with growth in earnings per share expected within the 4-8% guidance range, boosted by £50-100m of gains from divestments.

Ahead of first-half results, the company said its operating profit growth in the period would be more than offset by increased investment in its Blu e-cigarette brand of £100m, with EPS hit by the divestments last year.

The refillable Myblu product, which was only launched last year in the US, UK, France, Germany, Japan, Italy and Russia, was said have made "significant year on year revenue growth" amid increased investment in marketing, with a "strong" market share built in Europe and Japan.

In the USA, Imperial said it had achieved "good" revenue growth but had faced "some constraints due to market uncertainty following statements by the US Food & Drug Administration".

Tobacco sales fell slightly in the first half, but there was confidence that the second half would recover to deliver "modest" revenue growth, with "strong" pricing and product mix.

Underlying cash conversion was said to remain strong, with full year cash conversion expected to be around 90% as the company continues its policy of raising the dividend by 10% per year.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE