Imperial Tobacco’s total tobacco volume during the six months to the end of March, at 138.2 billion stick equivalents, was down by one percent on that of the six months to the end of March 2014. On an ‘underlying basis, volume was down by 5 percent.
Stick equivalent volume is said to include cigarette, fine-cut tobacco, cigar and snus volumes. Underlying volume change removes the impact of the company’s stock optimization program.
Meanwhile, Imperial’s ‘Growth Markets’ volume was down by three percent (11 percent underlying), from 49 billion to 48 billion, while Growth Markets market share was down from 5.6 percent to 5.5 percent. And its ‘Returns Markets’ volume was down by 1 percent (1 percent underlying), from 91 billion to 90 billion.
Growth Brand volume was increased by 17 percent (12 percent underlying), from 60.2 billion to 70.5 billion.
‘Our Growth Brands continue to outperform the market, with underlying volumes up 12 percent and underlying net revenues up 15 percent,’ Imperial said in announcing its results. ‘There were particularly strong performances from Davidoff, JPS, West and Parker & Simpson which supported the improved market share of Growth Brands, up 90 basis points to 6.1 per cent, with share up in 12 of our top 15 markets…’
Imperial said that performance highlights had included excellent results from Skruf snus in Scandinavia and growth in premium cigar volumes in the US, Spain, China and Brazil. ‘We also continued to capitalise on our world leadership in fine-cut tobacco, including in the UK where we further strengthened the Golden Virginia brand franchise with gains from the gv variant,’ it said.
Fontem was said to have continued to build its portfolio presence in Europe, widening the availability of the Puritane electronic cigarette brand in the UK through partnerships with additional retailers and launching the e-vapour brand JAI in France and Italy.
‘Other product launches are being evaluated in a number of non-tobacco lifestyle consumer categories and Fontem is also continuing to develop and license a range of patented technologies,’ the company said.
Imperial’s tobacco net revenue during the six months to the end of March, at £2,945 million, was down by four percent on that of the six months to the end of March 2014, £3,054 million.
Tobacco adjusted operating profit increased by two percent to £1,295 million, while logistics adjusted operating profit was unchanged at £73 million, and total adjusted operating profit increased by two percent to £1,367 million.
Adjusted earnings per share increased by four percent to 93.3p, while the interim dividend per share was up by 10 percent to 42.8p.
“This has been a good start to the year, said chief executive, Alison Cooper.
“The progress we’re making with our strategic agenda is improving the consistency and quality of our performance, with our Growth Brands delivering 12 per cent underlying volume growth and further gains from our Specialist Brands.
“We continued to build momentum in our Growth Markets and generated positive results from Returns Markets.
“Cash conversion was up, our debt reduced significantly and we delivered another dividend increase of 10 per cent.
“We are building on these successes in the second half and look forward to completing the US deal and realising the benefits of our enhanced brand equity and scale in this important market.”