Imperial Brands, a FTSE 100 tobacco group, is set to release its full-year results for fiscal 2023 on Tuesday. Here are the key details you should know:
Operating Profit
Analysts estimate that Imperial Brands will report an operating profit of £3.62 million ($4.42 billion) for the year ending September 30th. This is based on a consensus compiled from nine analyst estimates. In comparison, the operating profit for fiscal 2022 was £3.69 million.
Net Revenue
The company, known for brands such as Davidoff, Gauloises, and JPS, is expected to report net revenue from tobacco and next-generation products of £8.04 billion. This figure is based on the same consensus and represents growth from the previous year’s £7.79 billion.
What to Watch For
Tobacco Sales
Industry experts will be monitoring the company’s tobacco sales closely to assess how higher pricing is impacting volume declines. Jefferies analyst Owen Bennett cautions that they anticipate a slowdown in market share momentum, particularly in the U.S. Furthermore, Imperial Brands is expected to have the lowest full-year volume delivery among global tobacco players. Analysts predict a 5% decline in volumes compared to the previous year, amounting to 202 billion stick equivalent volumes.
Stay tuned for Imperial Brands’ full-year results to gain a comprehensive understanding of their performance in fiscal 2023.
NGP Sales: Adapting to a Changing Landscape
The focus of NGP (Next Generation Products) sales for the group will be on their progress in adapting to a world where cigarettes face increasing scrutiny. With the development of alternatives like vapes, heated tobacco, and oral nicotine products, the race to dominate the market is heating up. Analysts estimate NGP revenue to reach GBP259 million, compared to GBP208 million in fiscal 2022.
Capital Returns: Rewarding Shareholders
Shareholders can expect a higher dividend payout from the group this year. Consensus estimates project a dividend of 145.1 pence per share, surpassing last year’s payout of 141.17 pence. Additionally, in October, the group revealed plans for a GBP1.1 billion share buyback in fiscal 2024.
Addressing Regulatory Concerns
Investors are keen to hear the group’s stance on recent proposals by the U.K. government to regulate cigarette sales. Citi analysts note that while regulatory changes will impact the tobacco profit pool over time, their full implementation – including changes to the legal smoking age – is likely to be 3-4 years away, prompting countries around the world to potentially follow suit.