Imperial sees modest full-year earnings growth

August 19, 2014
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LONDON, Aug 19 (Reuters) – Imperial Tobacco (LSE: IMT.Lnews) said itexpected modest earnings growth in the current financial yearthanks to a slight upturn in Europe’s cigarette market.

The maker of Davidoff and Gauloises cigarettes said salesvolume for its top-growth brands grew 3 percent in the ninemonths to June 30.

Underlying net revenue rose 2 percent to 4.75 billionpounds. On a reported basis, factoring in the impact of foreignexchange swings, revenue fell 1 percent.

“The market as a whole has slightly improved in the pastquarter,” Imperial said in a statement. “Although we have seen amodest deceleration in the rate of market decline in parts ofEurope, this has been offset by a significant deterioration inthe Russian market and the impact of the turbulent situation inthe Middle East.”

It said the markets in which it operates were shrinking atan annual rate of about 4 percent.

Taxation and regulation of cigarettes are increasing in manycountries and tobacco companies like Imperial are moving quicklyinto the e-cigarette market.

Imperial is set to become the world’s third-biggestcigarette company in the United States, and the leadinge-cigarette maker in the country, after it agreed last month tobuy some assets from Reynolds American (NYSE: RAInews) and Lorillard, which are merging.

Imperial reiterated a plan for a 10 percent increase in itsdividend and said a cost cutting programme was on track todeliver incremental savings of 60 million pounds for the year. (Reporting by Martinne Geller and Kate Holton; editing by TomPfeiffer)

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