Proactive Investors - The jury remains out on Imperial Brand’s move to distance itself from its legacy (and very profitable) tobacco operations.
Shares are down by a fifth this year despite the Davidoff, West and Rizla owner throwing mountains of cash at shareholders through dividends and buybacks.
Of course, any ESG fund will have Imperial on its blacklist, but others seem to be deserting as well given the relentless regulatory pushback against the tobacco industry.
Even Rishi Sunak is joining in by trying to stop anyone born after 2009 smoking at all.
Wealth platform Hargreaves Lansdown (LON:HRGV) suggests the poor share performance reflects this pressure and the failure of new products that were supposed to replace cigarettes to make any real headway.
Vaping is coming under more and more health-related scrutiny and having already thrown huge sums at it as the new big thing, at some point hard decisions might have to be made.
Consensus forecasts for the year to September 2023 are for revenue growth of 6% to £9.4 billion, including NGP sales of just £259 million (against £166 million last year).
Adjusted operating profit should be £3.9 billion against £3.7 billion.
For 2024, stick (cigarette) volumes are forecast to drop by 14% to 173 billion, stated net revenues are seen rising 1% to £9.6 billion and adjusted operating profit is expected to rise 3% to £4 billion, according to Hargreaves.
For a business supposedly in managed decline, those are still big numbers whatever the share price might suggest.