Imperial Brands (IMB)

[Dod101]

The market seems unimpressed by these results with the share price down over 1%.

Dod

[scrumpyjack]

The big risk with tobacco shares must be a court somewhere someday awarding gazillions of damages against them for knowingly causing the deaths of many of their customers.

Not for me.

[moorfield]

The big risk with tobacco shares must be a court somewhere someday awarding gazillions of damages against them for knowingly causing the deaths of many of their customers.

Not for me.

The big risk with tobacco oil shares must be a court somewhere someday awarding gazillions of damages against them for ...

The big risk with tobacco banking/insurance shares must be a court somewhere someday awarding gazillions of damages against them for ...

The big risk with tobacco pharma shares must be a court somewhere someday awarding gazillions of damages against them for ...

And so on .... (you get my drift I hope).

IMB (and BATS for that matter) certainly for me, in a sectorally well diversified portfolio!

[idpickering]

Update on Russia and Ukraine

Following recent developments, we have today suspended all operations in Russia. This includes halting production at our factory in Volgograd and ceasing all sales and marketing activity.

This decision comes amid a highly challenging environment in Russia as a result of international sanctions and consequential severe disruption. We will be supporting our Russian employees, who continue to be paid while operations are paused.

We have already suspended our operations in Ukraine in order to prioritise the safety and wellbeing of our 600 employees in that country.

Russia and Ukraine are relatively small markets in the context of the Group, in total representing around 2 per cent of net revenues and 0.5 per cent of adjusted operating profit in FY21.

https://www.investegate.co.uk/imperial- ... 07211876E/

[monabri]

Continue to pay their employees....so, how does this increase pressure on Putin?

[Dod101]

Continue to pay their employees....so, how does this increase pressure on Putin?

I don't think anyone said that it did? What it does though is continue to pump presumably western funds into Russia although given the current international value of the Rouble not by very much. It might even provide some support for the west at least from the Imperial Brands employees.
But in fact, I suppose we can assume that there will be some Roubles in the Russian till so it will not be costing Imperial very much at the moment anyway.

Dod

[idpickering]

UPDATE ON RUSSIA & REVISED GUIDANCE

Following our announcement of 9 March 2022, we have begun negotiations with a local third party about a transfer of our Russian assets and operations. We believe that, in the current circumstances, an orderly transfer of our business as a going concern would be in the best interests of our Russian colleagues. We employ 1,000 people in Russia in our sales and marketing operations and in our factory in Volgograd - and their safety and wellbeing is our key priority in this process. We will also continue to pay their salaries until any transfer is concluded.

Meanwhile, we are also supporting our Ukrainian colleagues and their families, including with transport and accommodation to enable them to escape the areas most severely hit by conflict, as well as resettlement assistance for those who have left Ukraine.

We have evaluated the financial impact of an exit from Russia and the previously announced suspension of operations in Ukraine on our full-year guidance for FY22. We now expect full-year constant currency net revenue growth of around 0-1 per cent. While there will be some ongoing costs related to the suspension in Ukraine, we expect a relatively small impact on our constant currency adjusted operating profit, reflecting the limited profit contribution of the two markets. In FY21, Russia and Ukraine represented in total around 2 per cent of net revenues and 0.5 per cent of adjusted operating profit. Any transaction relating to our Russian business is subject to agreement being reached.

https://www.investegate.co.uk/imperial- ... 00068004E/

[idpickering]

Trading Statement.

· Good progress in delivering on our strategic objectives

· Growth in aggregate market share in top-five priority markets

· First-half adjusted Group operating profit ahead of last year on constant currency basis

· Full-year outlook in line with revised guidance issued on 15 March

· NGP trials progressing well, further update on next steps to be given at the interim results

· Cash conversion remains strong supporting year-on-year deleverage

Imperial Brands continues to perform in line with its five-year strategy launched in 2021. Focused investment in our top-five combustible markets, which account for around 70 per cent of adjusted operating profit, has driven an increase in aggregate market share for those markets. Gains in the US, UK and Australia more than offset declines in Germany and Spain. These share gains were achieved while maintaining strong pricing discipline, and overall tobacco volumes are in line with expectations.

Consumers have responded positively to the pilots of our Pulze heated tobacco system in Greece and the Czech Republic and an improved consumer marketing proposition for our blu vapour product in the US. We are making good progress against our strategic objective of building a sustainable, consumer-centric Next Generation Product (NGP) business and we will provide an update on our next steps at the interim results. First-half NGP revenues are expected to be slightly ahead of the prior period, driven by growth in Europe.

We are on track to deliver full-year results in line with our revised guidance issued on 15 March, with expected full-year net revenue growth of around 0-1 per cent on a constant currency basis and adjusted operating profit growth of around 1 per cent.

First-half Group net revenue is expected to be broadly flat on last year on a constant currency basis, in line with our expectations. This reflects a weaker tobacco performance in Europe, which offsets growth in other regions. Europe's performance has been driven by the return to pre-COVID purchasing patterns as Northern Europeans resume international travel, as well as price phasing in some markets. However, price increases during the latter part of the first half will support a stronger revenue performance in the second half.

First-half Group adjusted operating profit is expected to grow by around 2 per cent on a constant currency basis, benefiting primarily from reduced losses in NGP. As expected, tobacco performance will be weighted to the second half. First-half tobacco operating profit will be broadly flat on last year on a constant currency basis, with increased investment behind our strategy offsetting the benefit of reduced US litigation costs compared to last year.

At current exchange rates, translation foreign exchange is expected to be a c. 2 per cent headwind on first-half earnings per share and a 1 per cent headwind on full year earnings per share.

Our adjusted operating cash conversion remains strong on a 12-month basis and we are on track to deliver in line with expectations at the half and full year. Our first-half leverage (adjusted net debt to EBITDA) will improve year on year, with 12-month leverage expected to be c. 2.4 times at the half year (HY21: 2.6x), reflecting the usual seasonal variations in cash flow. We expect to deliver a further year-on-year improvement in leverage at the full year.

We continue negotiations with a local third party about an orderly transfer of our Russian assets and operations as a going concern. Meanwhile, we also continue to support our Ukrainian colleagues and their families, including with transport and accommodation to enable them to escape the areas most severely hit by conflict, as well as resettlement assistance for those who have left Ukraine.

The interim results for the six months ended 31 March 2022 will be announced on 17 May 2022.

https://www.investegate.co.uk/imperial- ... 00073994H/

[Dod101]

Trading Statement.

· Good progress in delivering on our strategic objectives

· Growth in aggregate market share in top-five priority markets

· First-half adjusted Group operating profit ahead of last year on constant currency basis

· Full-year outlook in line with revised guidance issued on 15 March

· NGP trials progressing well, further update on next steps to be given at the interim results

· Cash conversion remains strong supporting year-on-year deleverage

Imperial Brands continues to perform in line with its five-year strategy launched in 2021. Focused investment in our top-five combustible markets, which account for around 70 per cent of adjusted operating profit, has driven an increase in aggregate market share for those markets. Gains in the US, UK and Australia more than offset declines in Germany and Spain. These share gains were achieved while maintaining strong pricing discipline, and overall tobacco volumes are in line with expectations.

Consumers have responded positively to the pilots of our Pulze heated tobacco system in Greece and the Czech Republic and an improved consumer marketing proposition for our blu vapour product in the US. We are making good progress against our strategic objective of building a sustainable, consumer-centric Next Generation Product (NGP) business and we will provide an update on our next steps at the interim results. First-half NGP revenues are expected to be slightly ahead of the prior period, driven by growth in Europe.

We are on track to deliver full-year results in line with our revised guidance issued on 15 March, with expected full-year net revenue growth of around 0-1 per cent on a constant currency basis and adjusted operating profit growth of around 1 per cent.

First-half Group net revenue is expected to be broadly flat on last year on a constant currency basis, in line with our expectations. This reflects a weaker tobacco performance in Europe, which offsets growth in other regions. Europe's performance has been driven by the return to pre-COVID purchasing patterns as Northern Europeans resume international travel, as well as price phasing in some markets. However, price increases during the latter part of the first half will support a stronger revenue performance in the second half.

First-half Group adjusted operating profit is expected to grow by around 2 per cent on a constant currency basis, benefiting primarily from reduced losses in NGP. As expected, tobacco performance will be weighted to the second half. First-half tobacco operating profit will be broadly flat on last year on a constant currency basis, with increased investment behind our strategy offsetting the benefit of reduced US litigation costs compared to last year.

At current exchange rates, translation foreign exchange is expected to be a c. 2 per cent headwind on first-half earnings per share and a 1 per cent headwind on full year earnings per share.

Our adjusted operating cash conversion remains strong on a 12-month basis and we are on track to deliver in line with expectations at the half and full year. Our first-half leverage (adjusted net debt to EBITDA) will improve year on year, with 12-month leverage expected to be c. 2.4 times at the half year (HY21: 2.6x), reflecting the usual seasonal variations in cash flow. We expect to deliver a further year-on-year improvement in leverage at the full year.

We continue negotiations with a local third party about an orderly transfer of our Russian assets and operations as a going concern. Meanwhile, we also continue to support our Ukrainian colleagues and their families, including with transport and accommodation to enable them to escape the areas most severely hit by conflict, as well as resettlement assistance for those who have left Ukraine.

The interim results for the six months ended 31 March 2022 will be announced on 17 May 2022.

https://www.investegate.co.uk/imperial- ... 00073994H/

Except for the dividend announcement that is almost the interim result statement!

Dod

[idpickering]

Business Highlights

· Good progress in delivering on our strategic objectives

· Strategic investment driving growth in aggregate market share in top-five priority markets

· Successful NGP trials underpin further market roll-outs in heated tobacco and vapour

· Implementing our new purpose, vision and behaviours to align our culture to our strategy

· Strong operating cash generation delivering further deleverage, as anticipated

· On track to deliver full year results in line with guidance

And later;

Dividend payments

The Group paid two dividends of 48.48 pence per share in December 2021 and March 2022.

The Board has approved an interim dividend of 42.54 pence per share which will be paid in two payments of 21.27 pence per share. The first interim dividend payment will be paid on 30 June 2022 to shareholders registered on 27 May 2022. The second interim dividend payment will be paid on 30 September 2022 to shareholders registered on 19 August 2022. This interim dividend is an increase of 1 per cent, or £4 million, in line with the Group's progressive dividend policy.

https://www.investegate.co.uk/imperial- ... 00106963L/

Ian.

[Dod101]

These are very disappointing results despite all their optimistic comments, driven by exiting Russia and currency (presumably exchange rates) That presumably accounts for the modest increaser in the dividend. In fact to me the only bright spot is a reduction in debt by about £1 billion.

Can't see anyone being too impressed by that.

Dod

[Dod101]

So far no change in the share price. Probably it is being protected by its absurdly high yield so we might even see an increase based on the fact of no reduction in the dividend!

Dod

[idpickering]

So far no change in the share price. Probably it is being protected by its absurdly high yield so we might even see an increase based on the fact of no reduction in the dividend!

Dod

They're up 4% as I type Dod. One can't sniff at that methinks lol.

Ian.

[vand]

Dod101 surely you must realise that share price quotes are 15mins delayed...

Very happy to have a large chunk of my holdings in IMB and also BATS. Naysayers be damned.
IMB could double and it would still be cheap.

[idpickering]

Trading Statement.

Imperial Brands announces share buyback programme and affirms trading in line with expectations

· Strengthened balance sheet and achievement of target leverage enable immediate start of an ongoing share buyback programme

· £1 billion of shares to be repurchased in first 12 months to return surplus capital

· Total capital returns in FY23, including ordinary dividends and share buybacks, expected to exceed £2.3 billion, representing c. 13% of current market capitalisation

· FY22 trading in line with expectations with growth in aggregate market share for top-five priority markets

· Good progress with our next generation product launches supports further market roll-outs

In line with its five-year strategy to deliver sustainable growth and enhanced shareholder returns, Imperial Brands today announces the start of an ongoing, multi-year share buyback programme. This is the culmination of the two-year 'strengthening' phase of our plan, as we move into the next three-year 'improving returns' phase.

We intend initially to repurchase up to £1 billion of shares in the period from 7 October 2022 to the end of September 2023. This would represent approximately 5.5% of the issued share capital of Imperial Brands based on yesterday's market close. Over time, we intend to deliver a material reduction in the capital base, providing an ongoing source of shareholder returns in addition to our progressive dividend policy.

Stefan Bomhard, Imperial Brands CEO, said: "The launch of our new buyback programme is an important milestone in our five-year strategy announced in January 2021. Over the past two years, increased investment and a more consumer-centric approach have improved delivery in both our priority combustible markets and next generation product operations. Disciplined capital allocation has strengthened our balance sheet to reach our target leverage levels.

"Today's announcement is underpinned by this improving performance and our confidence in being able to continue generating strong cash flows to support growing shareholder returns in the years to come. We are committed to a progressive dividend and an ongoing buyback programme to meaningfully reduce the capital base over time."

FY22 trading performance

Trading in the year has been in line with expectations. Targeted investment in our five largest combustible markets which account for around 70% of operating profit has driven an improvement in aggregate market share. At constant currency, the growth rate of our tobacco net revenue improved in the second half compared with the first, driven by a stronger price mix. As expected, the recovery of international travel has, over the course of the year, led to a return to pre-COVID purchasing patterns. This has led to increased volume declines, particularly in Northern Europe, partly offset by volume growth in Southern Europe and Duty Free.

We continue to make good progress in implementing our refreshed NGP strategy. Further share gains have been made with Pulze and iD, our heated tobacco offering, in Greece and the Czech Republic, and in the past month we launched in Italy, Europe's largest heated tobacco market. Our consumer trial of blu 2.0, a new pod-based vapour device, in selected cities in France has been well received by consumers and the trade.

In line with previous guidance, we expect full-year net revenue and Group adjusted operating profit to both grow by around 1 per cent at constant currency. At current exchange rates, translation foreign exchange is expected to be a c. 1 per cent tailwind on full-year net revenue and a c. 2 per cent tailwind on full-year adjusted earnings per share.

https://www.investegate.co.uk/imperial- ... 00089544B/

Ian.

[Dod101]

Having apparently sorted out Russia earlier in the year, this looks like a good move for two reasons, firstly it will reduce the number of shares in issue which should help the dividend yield (and surely in the end the share price) and secondly it would indicate that at last they are getting on top of their debt.

Dod

[idpickering]

The above announcement has gone down well it seems, with the IMB SP being up 3.7% as I type.

Ian.

[idpickering]

Imperial Brands plc initial share buyback tranche of up to £500 million.

On 6 October 2022 Imperial Brands plc (the "Company") announced the start of an ongoing share buyback programme.

We intend initially to repurchase up to £1 billion of shares in the period from 7 October 2022 to the end of September 2023.

The share buyback is in line with the Company's policy to distribute surplus capital to shareholders having reduced leverage to the lower end of its 2.0 - 2.5 times net debt to EBITDA target range.

To execute the first tranche of this buyback, the Company has entered into an irrevocable and non-discretionary arrangement with its broker Credit Suisse International ("Credit Suisse") to buyback up to £500 million of its shares commencing from 7 October 2022 and ending no later than 29 March 2023 (the "Programme").

Under this arrangement, Credit Suisse, will act as principal and will make decisions under the Programme independently from the Company. Purchases may continue during any closed period to which the Company is subject. The purpose of the share buyback is to reduce the capital of Imperial Brands. All shares repurchased as part of this arrangement will be cancelled.

Share purchases will take place in open market transactions and be carried out on the London Stock Exchange and/or other recognised investment exchange(s) and may be made from time to time depending on market conditions, share price, trading volume and other factors.

Any purchases of ordinary shares by the Company in relation to this announcement will be effected within certain pre-set parameters and in accordance with (and subject to the limits prescribed by) the Company's general authority to repurchase shares. The maximum number of shares that may be repurchased under the Programme is 94,600,000 shares, being the number of shares the Company is authorised to purchase pursuant to the authority granted by shareholders at the Company's 2022 Annual General Meeting. The Programme will also be effected within the parameters of the UK Market Abuse Regulation and in accordance with Chapter 12 of the Financial Conduct Authority's Listing Rules. The Company confirms that it currently has no unpublished inside information.

https://www.investegate.co.uk/imperial- ... 00040991C/

Ian.

[torata]

Imperial Brands plc initial share buyback tranche of up to £500 million.

...
To execute the first tranche of this buyback, the Company has entered into an irrevocable and non-discretionary arrangement with its broker Credit Suisse International ("Credit Suisse") to buyback up to £500 million of its shares commencing from 7 October 2022 and ending no later than 29 March 2023 (the "Programme").

Under this arrangement, Credit Suisse, will act as principal and will make decisions under the Programme independently from the Company. Purchases may continue during any closed period to which the Company is subject. The purpose of the share buyback is to reduce the capital of Imperial Brands. All shares repurchased as part of this arrangement will be cancelled.

Share purchases will take place in open market transactions and be carried out on the London Stock Exchange and/or other recognised investment exchange(s) and may be made from time to time depending on market conditions, share price, trading volume and other factors.

...

https://www.investegate.co.uk/imperial- ... 00040991C/

Ian.

How does that work, then?
Are Credit Suisse incentivized somehow to purchase when the price is low? Or to do it in such a way that it doesn't put upward pressure on the price?
(I imagine with the way Credit Suisse are scrabbling about for income and capital, they'll be buying the shares one at a time to maximize transaction fees )

torata

[Dod101]

Imperial Brands plc initial share buyback tranche of up to £500 million.

...
To execute the first tranche of this buyback, the Company has entered into an irrevocable and non-discretionary arrangement with its broker Credit Suisse International ("Credit Suisse") to buyback up to £500 million of its shares commencing from 7 October 2022 and ending no later than 29 March 2023 (the "Programme").

Under this arrangement, Credit Suisse, will act as principal and will make decisions under the Programme independently from the Company. Purchases may continue during any closed period to which the Company is subject. The purpose of the share buyback is to reduce the capital of Imperial Brands. All shares repurchased as part of this arrangement will be cancelled.

Share purchases will take place in open market transactions and be carried out on the London Stock Exchange and/or other recognised investment exchange(s) and may be made from time to time depending on market conditions, share price, trading volume and other factors.

...

https://www.investegate.co.uk/imperial- ... 00040991C/

Ian.

How does that work, then?
Are Credit Suisse incentivized somehow to purchase when the price is low? Or to do it in such a way that it doesn't put upward pressure on the price?
(I imagine with the way Credit Suisse are scrabbling about for income and capital, they'll be buying the shares one at a time to maximize transaction fees )

torata

I have always understood that the principle aim of the buying broker is to avoid distorting the market. I do not know if they have parameters re the price but I suppose that could be part of the arrangement. In any case, it is a well established practice. As they say, it will depend on market conditions, share price, trading volumes and other factors. That suggests that avoiding distorting the market is a priority.

Dod