LONDON (ShareCast) - (Sharecast News) - Tobacco company Imperial Brands on Tuesday said full year operating profits rose 5.7% to £2.4bn although it took a hit from a write-off relating to its bankrupt Palmer & Harvey (P&H) distribution operation.
"Next generation" products (NGP), such as its blu e-cigarettes, helped drive profits, Imperial said as it raised the full-year dividend 10% to 187.8p.

Reported revenue rose 0.9% to £30.5bn but earnings per share fell 2.7% to 143.6 pence, hurt by the P&H write-off and foreign exchange headwinds.

Imperial said it expected to deliver constant currency revenue growth at, or above, the upper end of its 1-4% revenue growth range driven by consistent growth in tobacco and an acceleration in NGP revenues.

It added that it would increase investment in its e-cigarette brand blu by around £100m in the first half to support further revenue acceleration.

"This will result in a slightly lower adjusted operating profit in the first half that will be more than offset in the second half to deliver full year profit growth," the company said.

"We have clear levers to drive profitability and expect the NGP business to begin to contribute to group profit as we exit full year 2019, with margins continuing to build thereafter. Our medium term guidance for constant currency EPS growth of 4-8% remains in place."

Chief executive Alison Cooper said Imperial's main focus in NGP was on "transitioning smokers to blu, a significantly less harmful alternative to cigarettes".

"NGP also offers additive opportunities for our shareholders and the success of the international rollout of myblu has put us in a strong position to further invest and accelerate sales growth in FY19."

"Following our additional brand investment in tobacco over the past two years, we have increased growth brand volume, share and revenue in our priority markets."

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