(Reuters) -Imperial Brands said on Thursday trading for the year was in line with its expectations and reaffirmed its forecast, on the back of sustained demand, higher prices and strong adoption of tobacco alternatives such as e-cigarettes.
“This (guidance) is particularly encouraging given the inclusion of the now suspended Russian operations in last year’s comparators,” Hargreaves Lansdown analyst Derren Nathan said.
The company also announced a share buyback of 1.1 billion pounds ($1.34 billion).
The maker of Winston cigarettes blu vapes said its net revenue growth for tobacco products improved in the second half of the year, as higher prices helped offset the relatively steeper decline in volume when compared with historic averages.
Shares in the FTSE 100 firm were up 1.5% to 1,604.5 pence by 0727 GMT, as it bounced back from a sluggish first-half. They have however lost over 20% this year, as regulatory challenges have remained an overhang. Rival British American Tobacco has lost more than 24% of its share value.
Imperial’s update also comes a day after Britain’s government proposed banning younger generations from ever buying cigarettes, a move that would give the country some of the world’s toughest smoking rules and hurt the sales of major tobacco firms.
If passed into law, the smoking age would rise by one year every year, potentially phasing out smoking among young people almost completely by 2040, a briefing paper said.
In recent years, Imperial Brands has focused on its top five markets and expanding next-generation products deemed less harmful to health.
“The extremely cash generative nature of the business is still being underpinned by growth in Imperial’s aggregate market share in its five priority markets …,” Interactive Investor analyst Richard Hunter said.
($1 = 0.8230 pounds)
(Reporting by Eva Mathews in Bengaluru; Editing by Nivedita Bhattacharjee, Krishna Chandra Eluri and Michael Perry)
