Imperial Announces Share Buyback

Imperial Brands has announced the start of a multi-year share buyback program.

The company intends to repurchase up to £1 billion ($1.12 billion) of shares between Oct. 7, 2022, and the end of September 2023. This would represent approximately 5.5 percent of the issued share capital of Imperial Brands based on the Oct. 5, 2022, market close.

“The launch of our new buyback program is an important milestone in our five-year strategy announced in January 2021,” said Imperial Brands CEO Stefan Bomhard in a trading update. “Over the past two years, increased investment and a more consumer-centric approach have improved delivery in both our priority combustible markets and next-generation product operations. Disciplined capital allocation has strengthened our balance sheet to reach our target leverage levels.

“Today’s announcement is underpinned by this improving performance and our confidence in being able to continue generating strong cash flows to support growing shareholder returns in the years to come,” Bomhard added. “We are committed to a progressive dividend and an ongoing buyback program to meaningfully reduce the capital base over time.”

According to Imperial Brands, trading in the year has been in line with expectations. Targeted investment in the company’s five largest combustible markets (which account for around 70 percent of operating profit) has driven an improvement in aggregate market share.

A stronger price mix accelerated the growth rate of tobacco net revenue at constant currency exchange rates in the second half of fiscal 2022. The recovery of international travel has led to a return to pre-Covid purchasing patterns, with increased volume declines, particularly in Northern Europe, partly offset by volume growth in Southern Europe and duty-free.

Imperial Brands reported good progress in implementing its refreshed next-generation product strategy. The company’s Pulze and iD tobacco-heating products debuted in Italy, Europe’s largest heated-tobacco market, while gaining market share in Greece and the Czech Republic. The company says its new Blu 2.0 pod-based vapor device was well received during a consumer trial in France.

Imperial Brands will report its annual results for the year ended Sept. 30, 2022, on Nov. 15, 2022.