Imperial Brands, the tobacco company headquartered in Bristol, has reported stronger-than-expected profits for the financial year, driven by a surge in demand for vaping products and other smoking alternatives.
Revenues climbed to £32.4 billion for the year ending September 30, with next-generation product (NGP) revenue increasing by 26%. Adjusted operating profit rose 4.6% to £3.9 billion, exceeding the forecast of 4.3%.
The company noted that higher tobacco prices offset declining cigarette volumes, with tobacco profits up 2.5%. Chief Executive Stefan Bomhard highlighted strategic gains in priority markets and stabilization in German market share for the first time under the company’s new strategy.
Imperial remains “on track” to deliver £10 billion in capital returns over five years, representing 67% of its January 2021 market capitalization. Shareholder returns for 2025 are projected to rise to £2.8 billion, including a 13.6% increase in share buybacks.
Derren Nathan of Hargreaves Lansdown praised the company’s ability to navigate declining tobacco demand while driving growth in NGPs through strong pricing and innovation.