Higher tobacco prices to drive profit rise at Imperial Brands

Imperial Brands is set to reveal a rise in profits for the first half of the year after being boosted by increases in tobacco prices.

The JPS and Gauloises cigarette maker said it is “on track” to meet half-year and full-year financial targets as a result.

It told shareholders on Tuesday morning that it saw tobacco revenues grow on a constant currency basis, as well as a rise in its NGP (next generation products) business, which includes heated tobacco.

The firm’s combustible tobacco business – which predominantly covers cigarettes – reported declines in the UK and Germany.

However, bosses said this was broadly offset by gains in the US, Spain and Australia.

Imperial added: “At the same time, we have delivered strong pricing, more than offsetting wider industry volume pressures in certain markets.”

NGP net revenues for the first half of 2024 are set to grow “in the mid to high teens” as the firm continues to invest to expand this part of the business.

The company said first-half adjusted operating profits are set to surpass levels from 2023 as a result.

Imperial said: “We continue to make good progress implementing our five-year strategy to transform the business and we remain confident we will deliver the full-year accelerated adjusted operating profit growth in line with our previously stated medium-term guidance.

“This performance reflects our improved resilience to withstand geopolitical and macro-economic pressures as well as the benefit of our continued investment to strengthen performance and drive transformation.”