Imperial Brands plummets as unchanged outlook fails to impress investors
Shares in Imperial Brands fell sharply this morning after the group’s trading update failed to impress investors, even as the tobacco giant maintained its guidance.The Gauloises-maker kept its annual guidance unchanged as the pricing of tobacco products helped to offset the continued decline in volumes. At the same time, investment in next-generation (NGPs), such as vapes, weighed on profits. The FTSE 100-listed business said it expected low-single-digit growth in tobacco and NGP net revenue in the first half, with adjusted operating profit slightly higher year-on-year. Imperial Brands shares dropped 7.84 per cent to 2,829p this morning, dragging rival British American Tobacco shares down with it. Imperial said it was half-way through its £1.45billion share buyback programme, with analysts saying investors are being 'paid to wait'. Mark Crouch, market analyst for eToro said: ‘With 2.2billion in sight and buybacks continuing, investors are being paid to wait, a rare comfort when markets feel anything but settled.’ Drop: Shares in Imperial Brands fell on Tuesday after the group maintained its annual guidance Imperial Brands said it expected growth to accelerate in the second half, in line with previous guidance, as earlier price hikes feed through and investment phasing bolsters performance.Full-year guidance held firm with at least high-single-digit growth in earnings per share and free cash flow of at least £2.2billion. The business said 'robust' tobacco pricing was a key driver of growth, offsetting volume declines that were in the low single digits, while NGP growth is being supported by products such as Pulze heated tobacco and blu vaping devices.But Imperial Brands expects NGP losses to rise slightly as it continues to invest in building scale and market share.On the war in Iran, Imperial said there had been 'no material business impact to date' but uncertainty in the second half remains 'uncertain'. Duncan Ferris, an investment writer at Freetrade, said: 'Ultimately, for Imperial Brands to be a sustainable long-term play, its Next Generation Products will need to make steps toward significant profitability as combustible volume continues to decline. 'At present, though the revenue of products like heated tobacco is dwarfed by the core business, continued double-digit net revenue growth is an encouraging sign.'DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Imperial Brands plummets as unchanged outlook fails to impress investors
