The shares of Imperial Tobacco (LSE: IMT) (NASDAQOTH: ITYBY.US) gained 45p to 2,199p during early trade this morning after the cigarette group said its underlying revenues had dropped 1% during the nine months to 30 June.
Imperial, whose brands include JPS and Golden Virginia, also stated within its trading statement that underlying ‘stick equivalent’ volumes had declined 5% due to “weak” markets in Europe.
The FTSE 100 company blamed “austerity measures, rising unemployment and increased illicit trade with Spain” for the performance.
However, Imperial did confirm its “key strategic brands” had outperformed their markets by limiting their volume reduction to 1%. The group also claimed it had achieved “excellent results” from fine cut tobacco.
Alison Cooper, Imperial’s chief executive, said:
“Our full year expectations remain unchanged. We continue to focus on maximising opportunities for our total tobacco portfolio in the EU against a backdrop of weak industry volumes and are driving good in-market performances in Asia-Pacific and Africa and Middle East, with our share improving in many markets.“
In addition, Mrs Cooper confirmed Imperial’s restructure programme would deliver savings of £300m a year and that the group continues to aim for annual dividend growth of at least 10% over the medium term.
Assuming 10% dividend growth for the current year, Imperial’s final results in November should reveal a payout of 116p per share, which would support a potential yield of 5.3%.
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> Maynard does not own any share mentioned in this article.
