Imperial Brands Boosts Share Returns, Vapes Boom

Imperial Brands said on Tuesday that the nicotine company would boost shareholder returns to 2.8 billion pounds ($3.7 billion) in its new financial year, as it reported strong growth in vapes and other nicotine alternatives, sending its shares higher.

The maker of Blu vaping products has benefited from hiking tobacco prices to offset a decline in volumes, as well as rising demand for next generation products (NGPs) including vapes, e-cigarettes and oral pouches.

The company said it planned to buy back 1.25 billion pounds of shares in the year ending September 2025 and pay out cash dividends of about 1.5 billion pounds. That would be up from 2.4 billion pounds of shareholder payouts in fiscal 2024.

Imperial forecast 20-30 percent growth in NGP net revenues at constant currencies for fiscal 2024, ahead of some analyst expectations, but said overall results would be in line with guidance, with a stronger pound holding back its adjusted operating profit, according to Reuters.

Shares of the Bristol-headquartered firm were up 4.2% at 2,239 pence in morning trade, the biggest gain on London’s benchmark FTSE index.

“Imperial Brands is managing to drive growth not only in its fledgling next generation brands but also in ‘legacy’ tobacco products which still make up the lion’s share of the business,” said Derren Nathan, head of equity research at Hargreaves Lansdown.