Tobacco giant reaffirms growth targets and unveils a fresh £1.5bn buyback, extending a six-year run of heavy shareholder returns.
Imperial Brands (LSE: IMB) told investors on Thursday that it remains on course to hit its full-year targets, while unveiling a new £1.5bn share buyback for the coming year that sent shares up 2%.
The group said adjusted operating profit growth for the year to 30 September should land within its 3% to 5% guidance range, with high-single-digit earnings per share growth and free cash flow expected to top £2.2bn. The confirmation of guidance, paired with the scale of the new buyback, was the main driver behind the share price gain.
Imperial's core tobacco arm notched up a sixth consecutive year of net revenue growth, as price increases and market share gains in the US and Germany more than offset the continuing decline in cigarette volumes. Its next-generation portfolio of vapes, heated tobacco and oral nicotine products grew revenue at a double-digit rate, underlining the company's push to diversify beyond combustible cigarettes.
The new £1.5bn programme follows the completion of a £1.45bn buyback earlier this year and extends a long run of capital returns. AJ Bell's Dan Coatsworth noted that Imperial has handed shareholders almost £13bn through dividends and buybacks over the past six years, cutting its share count by more than 21%, which he said has supported 'respectable gains' in the stock even as the shares have lost momentum over the past six months.
The central challenge remains structural: smoking rates in Western markets continue to fall amid shifting consumer habits and tighter regulation, squeezing volumes. Imperial's pricing power with remaining smokers has so far kept revenues growing, and investors will be watching whether next-generation products can pick up more of the slack as the FY26 numbers come into focus.
This report is based on Imperial Brands’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Sean Pollock on Unsplash.
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