Mar 16 2015

Imperial Tobacco to Increase its Dividend by 10%

Published by at 3:15 pm under Tobacco companies

Imperial Tobacco stated that it would increase its dividend by a minimum of 10 % in the coming year, demonstrating assurance that cost slices will help it to deal with fragile consumer spending and larger taxes that weighed on its yearly revenue.
The same as other cigarette makers, Imperial has been struggling with decreasing sales in lots of markets, as more people stop smoking. On top of that, weakened economies and government tax boosts are making tobacco products less affordable, resulting in lower-priced cigarettes increasing in popularity.

Imperial, whose cigarette brands include Richmond, West, Davidoff and Gauloises, has resolved this by reducing costs, together with closing industries, ending up with over 60 million pounds of cost savings in the year to September 30. It explained it was on course to preserve about 300 million pounds every year by 2018.

The enterprise has also not too long ago floated a part of its logistics business, Logista, on the Spanish stock exchange, boosting 395 million pounds, which it used to pay down debt. By the end of its fiscal year, its net profit dropped by 11 % to 8.1 billion pounds.

Imperial Tobacco reported it projected to lift its dividend by a minimum of 10 % for its new fiscal year (2014/15), right after a 10 % boost for the year to September 30.
RBC Capital Markets experts stated the dividend objective was “a sign of Imperial’s confidence in its debt trajectory.”

The company’s shares increased by 3 % at 2,747 pence at 1116 GMT on Tuesday, the greatest gainer in the FTSE 100 index , demonstrating the attraction of massive tobacco companies and their ample dividends during choppy markets.

Shares of more substantial competitor British American Tobacco (BAT) boosted around 1.3 %, whilst the FTSE 100 index was fixed.

The world’s fourth-greatest worldwide cigarette company claimed net profits in its tobacco business dropped 6 % to 6.58 billion pounds in the financial year. As of October 10, experts on average were anticipating 6.97 billion, based on a company-compiled consensus.

Volume, which measures the range of tobacco sold, dropped 4 %, which the firm explained was in accordance with that of its entire markets.

Changed revenue per share dropped 3 % to 203.4 pence on a revealed basis in the year, also lacking analysts’ estimations of 214.2 pence per share, according to the consensus.
“Trading factors keep on being solid in several areas however the actions we have undertaken to improve the quality and sustainability of the business have set us in a more robust position to generate development and develop lasting value for our shareholders,” Chief Executive Alison Cooper explained.

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