£2bn fire-sale of a cigarette empire

Imperial tobacco sell-off to focus on vaping boom

MORE than £2bn of tobacco businesses look set to be sold by Imperial Brands as it moves its focus to e-cigarettes.

The maker of Winston, Kool and Gauloises is shedding chunks of the company to cash in on vaping products, which have seen huge growth in recent years.

Bosses are hoping to grab hold of swathes of the world’s 1bn tobacco smokers. Chief executive Alison Cooper said it was too early to say which parts of the business would be sold, but admitted vaping was now a big focus.

The 52- year- old said: ‘ When you have got a dynamic like this happening – the opportunity for consumers to switch to new products – I think we are in a very strong position to capitalise on that growth.’

Chief development officer Matthew Phillips added: ‘We see next- generation products as being an opportunity for us.’

Imperial’s specialist brands, which includes its popular e-cigarette range Blu, made sales of £569m during the half-year, up 1.4pc on last year. But the firm has been under pressure, with shares slipping almost 30pc in the past year.

Its change in focus comes after Imperial sold a range of tobacco products in the US in March, including cigarette papers, tips and other smoking accessories.

Vaping is gaining ground with 30m-50m users around the world, in particular in the UK and US.

In the UK it is thought there are around 4m to 5m vapers, compared to around 8m people who smoke.

Imperial is aiming to sell around £2bn worth of the business over the next two years, with more to come. The cash will be used to pay down debt of more than £12.6bn, invest in growth and return some cash to shareholders.

Investec analysts said: ‘We have previously highlighted the need for action of this kind, and are pleased to see the company moving in this direction.’

Overall, Imperial reported betterthan- expected first- half results, with sales of £14.2bn and profit of £833m, down 7.6pc. Profits were hit by distributor Palmer and Harvey going bust.

Imperial is among several tobacco firms turning to alternatives as demand for traditional cigarettes falls.

It sold 123.6bn cigarettes over the half-year, a decline of 2.1pc. Its cigarette sales fell 4.1pc last year, to 265.2bn.

In November last year, Imperial bought Nerudia, a British maker of nicotine liquids for e- cigarettes, as it expands its portfolio of alternatives.