The FTSE 100 group company, Imperial Brands Plc offers a variety of cigarettes, papers, smokeless tobacco and cigars as well. Its areas of operations are categorised into segments like growth markets, United States, Returns Market North, Returns Market South and Logistics. The group is engaged in the production and distribution of cigarettes and tobacco-related products.
On May 08, 2019, the group reported its first-half results for the period ended March 31, 2019. Revenue surged by 2.3 per cent to £14,390 mn on a reported basis against the revenue of £14,060 mn during the same period of the previous financial year. Group’s operating profit on a reported basis surged by 38.1 per cent to £1,150 mn and basic earnings per share surged by 37.7 per cent to 71.2 pence. Total dividend per share stood at 62.56 pence, up by 10 per cent from the last year data.
However, the group reported growth in the top-line, but the sales volume, during the reported period plummeted by 6.9 per cent to 115.2 bn SE. The loss in the volume was completely offset by a 6.5 per cent surge in the price across the brands.
The group’s so-called Next Generation Product revenue surged by around 200 per cent to £148 mn, led by increased sales in Europe, Japan and in the United States, although the group witnessed a slowdown in the United States where regulatory statement on the use of e-cigarettes has tempered growth in the NGP segment.
In April this year, the group announced that they are planning to dispose of its premium cigar business, which is carrying brands like Cohiba and Montecristo, as part of the two-year divestment programme from which the group is planning to raise around £2 bn. The company has already raised around £280 mn from the disposal of a range of tobacco products in the United States and through the disposal of its stake in the logistic company Logista.
Post the announcement of the US FDA on the linkage between the consumption of e-cigarettes and chances of epilepsy, the shares of the tobacco baron had been falling. However, the final statement is yet to come.
Daily price chart (as on May 08, 2019), before the market close. Source: Thomson Reuters
At the time of writing (as on May 08, 2019 at 02:31 PM), the shares of Imperial Brands were quoting at GBX 2,185.0 and declined by 133.5 points or 5.7 per cent against the previous day closing price. During the past one year, shares have registered a 52w high of GBX 3,009.0 and a 52w low of GBX 2,239.50, and at the current market price, as quoted in the price chart, shares were trading around 27 per cent below the 52w high price level.
Post the US FDA statement on the use of e-cigarettes, shares of the Imperial Brands took a nosedive and since April'19, the stock has entered into a bearish zone as it started trading below its 200-day simple moving average price. However, any favourable announcement from the US FDA could drive the stock price.
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