Imperial Brands Reports Earnings Growth Amid Revenue Decline

Imperial Brands Plc sees first-half earnings rise, but a drop in revenue. The company maintains its outlook, emphasizing a solid earnings per share increase despite challenges.

Date: 14-05-2025

AI Rating: 6

**Imperial Brands Update:** Imperial Brands Plc has reported an increase in profit before tax to £1.30 billion from £1.14 billion in the same period last year. The earnings per share (EPS) rose slightly to 96.7 pence, up 0.7% from the previous year. This growth in EPS signals resilient profitability, appealing to investors.

However, revenue figures indicate a troubling trend, with a decline of 3.1% down to £14.60 billion. A decrease in operating profit by 2.5% to £1.46 billion further mirrors this trend, indicating challenges in revenue growth and profit margins. The adjusted operating profit experienced a smaller dip at just 1%, standing at £1.65 billion.

While the tobacco net revenue rose by 2.7%, this was balanced by a decline in volumes, down 3.2%, indicating pressure on market share amid broader industry declines. The strong pricing strategy, which led to a 5.9% growth, indicates that despite reduced volume sales, the company can maintain pricing power.

The announcement of an interim dividend increase of 78.5% to 80.16 pence is a strong positive indicator, reflecting the company's commitment to returning value to shareholders. Additionally, the company is projecting a minimum EPS growth rate of high-single digits for the fiscal year at constant currency, reaffirming confidence in the business model.

In terms of leadership, the transition to new CEO Lukas Paravicini from Stefan Bomhard, who will aid in the transition until mid-2026, could bring fresh perspectives to drive future strategies. This does present some risks during the transitional period, but it also provides an opportunity for resolution of existing challenges.

Stocks: IMB.L IMBBF.PK IMBBY.PK