Tobacco giant Imperial Brands has revealed that sales lifted higher over the past year as solid demand for tobacco offset weakness in its e-cigarette operations.
It reported that group revenue increased by 0.8% to £7.98 billion for the year to September 30, after tobacco revenues rose by 1.8%.
Meanwhile, its Next Generation Products (NGP) business, which includes e-cigarettes and other products, saw sales slide by 27% after suffering a sharp decline in the first half of the year.
Nevertheless, adjusted operating profits declined by 5.7% to £3.5 billion, as it was impacted by lower profit on tobacco due to “Covid-19 and regulatory costs”.
The group told investors it expects to deliver a “stronger financial performance” during the current financial year, with a return to profit growth.
It said it hopes to post low to mid-single digit growth in organic adjusted operating profit for the 2020-21 year, despite “the ongoing uncertainties from the global pandemic”.
Last month, the group also sold its premium cigar business for around 1.2 billion euros (£1.1 billion).
The company added that a “strategic review” was taking place under its new boss, with the group set to update the market about the process in January.
Stefan Bomhard, who joined the company as chief executive in July from car retail firm Inchcape, said: “Although this has been a difficult year, the resilience of our tobacco business and the measures we have taken to improve our NGP (Next Generation Products) operations reinforce my confidence in the future potential of the business.
“With a more disciplined focus and better execution we can realise significant value for our stakeholders over time.”
Shares in the company were 1.3% lower at 1,384.5p in early trading.