£1.1 Billion: Imperial Brands Announces 2024 Share Buyback Plan

According to a report by Shares Magazine on October 5, Imperial Brands (IMB) shares rose by 3% to £16.30, as the tobacco company stated that it would successfully achieve its performance for the fiscal year 2023 as guided and announced a £1.1 billion share buyback for the fiscal year 2024.

Imperial Brands owns many well-known brands, including Davidoff, Gauloises, and Winston. The company stated that "strong tobacco pricing" and the momentum of "next-generation products" (NGP) have driven net revenue growth across all categories.

Imperial Brands expects that for the fiscal year ending September 30, tobacco and NGP revenues will grow in the low single digits, and the group's adjusted operating profit growth will accelerate to the "lower end of the mid-single digits range."

The company commented: "We expect targeted investments in the focus combustible market to bring further slight growth in overall share for our top five markets throughout the year. This will complete three consecutive years of market share improvement, after several years of decline. As in the first half, the U.S., Spain, and Australia are expected to achieve market share growth, significantly offsetting declines in Germany and the UK."

Meanwhile, NGP revenues accelerated growth in the second half of the year, mainly due to strong growth in Europe, as the company launched "product and market promotion" initiatives across categories, including electronic cigarettes, heated tobacco, and oral nicotine.

The company committed to a £1.1 billion share buyback for the fiscal year 2024, a 10% increase from the £1 billion buyback in the previous fiscal year. In the previous fiscal year's buyback, the company repurchased 5.5% of its share capital, totaling 52,107,043 shares.

Imperial Brands stated that this increase reflects "confidence in our strategy and cash generation" and is also a commitment to returning more to shareholders.

Imperial Brands stated: "We expect to return over £2.4 billion of capital to shareholders in the next fiscal year, representing about 17% of our current market value."

The share prices of Imperial Brands and its competitor British American Tobacco (BATS) were negatively impacted this week by Prime Minister Rishi Sunak's comments regarding a potential increase in the legal smoking age and a review of electronic cigarette products. AJ Bell's investment director Russ Mould stated: "The UK is already one of the company's weak points, and political intervention will further exacerbate its issues. However, this is a global company, and it stated that the U.S., Spain, and Australia remain key opportunities to offset weaknesses in other regions."