Imperial Tobacco Group PLC Up 3% On Robust Earnings Growth

Imperial Tobacco (LSE: IMT) (NASDAQOTH: ITYBY.US) published its preliminary results for the 12 months to 30 September 2013 this morning, and its share price is currently up over 3%.

Tobacco net revenue was flat at £7,007m, as was tobacco adjusted operating profit, at £3,003m.  But despite a 2% fall in volumes of its “growth brand” products, down to 129bn from last year’s 132bn, the company reports that net revenue from them rose 2%, on an increase in market share of 30 basis points.

The company also says that it has made “significant transition progress” in realigning its footprint and in optimising its brand portfolio, and describes the 6% increased in earnings per share as a “robust performance”.

Imperial Tobacco is increasing its full-year dividend by 10%, to 116.4p per share, and states that it has returned £1.6bn to shareholders over the past year.

Commenting on the results, Chief Executive Alison Cooper said:

Our focus on driving quality growth and transitioning the business has delivered another year of earnings growth and further strengthened our sustainability.

“Market conditions remain tough. We remain focused on maximising our long-term growth potential and in 2014 our priority is to continue transitioning the business: increasing investment behind our key brands and markets to drive quality growth; delivering our cost optimisation programme; and implementing our stock optimisation programme. A reasonable working assumption for 2014 therefore is modest growth in earnings per share at constant currency, with another strong dividend increase of at least 10%”.

Imperial Tobacco’s share price stands at 2,380p at the time of writing. Despite this morning’s rise that’s down 0.75% so far this year and down almost 2% on this time last year.  Over the same periods the FTSE 100 has risen 14.6% and 15.8% respectively.

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> Jon doesn't own shares in Imperial Tobacco.