Imperial Brands to step up investment in vaping as profit, revenue improves

BRITISH TOBACCO firm Imperial Brands signalled more investment in vaping as it reported better than expected full-year revenue and profit on Tuesday.

The company, which makes Gauloises and Winston cigarettes, is preparing to launch a heated tobacco product in Japan in the first quarter of 2019, its chief executive said

That would narrow the gap between it and bigger rivals Philip Morris and British American, which already sell vaping devices made with tobacco.

Rather than burning tobacco to make smoke, those devices heat it to create a vapour. The companies believe that makes them less dangerous than cigarettes, and also more attractive to some smokers than e-cigarettes made with liquid.

Imperial also plans to increase investment in its e-cigarette brand blu by around £100m over months.

The company is also in talks with health regulators in the United States, the world’s biggest vaping market, about launching a ‘connected’ e-cigarette there with built-in age verification, CEO Alison Cooper said. the coming six

Imperial could be ready to launch that next year, she said, at a time when the FDA is cracking down on youth e-cigarette use.

“We continue to think Imperial will surprise investors to the upside in a reduced risk world,” Jefferies analyst Owen Bennett said.

Imperial reported revenue from tobacco and next-generation products rose 2.1 percent to £7.73bn in the year to September 30.

That was better than analysts’ average estimate of £7.63bn, according to a company-supplied consensus. Excluding one-off items, adjusted earnings were 272.2 pence per share, topping analysts’ average estimate of 269.3 pence.

For the year ahead, Imperial said it expects to deliver constant currency revenue growth at, or above, the upper end of a 1 to 4 per cent growth range.