Imperial Brands (LON: IMB), the tobacco and next generation products group, said today it has reaffirmed its full-year guidance and will buy back up to £1.5bn of its shares in its next financial year. The shares were higher in early trade.
The stock traded at 2,535.5p at 8.02am, up 1.9% from yesterday’s close of 2,488p, having opened at 2,507p. That is a delayed intraday price, not a close. Last Thursday the shares hit a 52-week low of 2,408p, and they remain below the 2,929p close of the 29th of July.
The trading update, released at 7am, reaffirmed guidance rather than raising it. Three minutes later the company announced the first tranche of the new buyback: up to £750m, run by HSBC Bank plc under an irrevocable, non-discretionary arrangement, meaning the bank buys independently of the company. Purchases start today and finish no later than the 4th of May 2027. All repurchased shares will be cancelled.
Imperial framed the programme as part of its capital returns policy.
We remain committed to returning surplus capital to shareholders via our ongoing “evergreen” share buyback programme, which represents an ongoing source of shareholder returns, alongside our progressive dividend policy.
Imperial Brands
The £750m tranche is about 4% of a market value of about £18.5bn, and the full £1.5bn is about 8%. It is also a step up of about 3.4% from the £1.45bn buyback for the year just ended, which is now complete. Imperial says its issued share capital is down over 21% since October 2022, and that leverage sits at the lower end of its 2.0 to 2.5 times target for net debt to EBITDA, a measure of debt against operating earnings.
Guidance, at constant currency, includes group adjusted operating profit growth within 3% to 5%, high single-digit growth in adjusted earnings per share and free cash flow of more than £2.2bn. Tobacco net revenue is expected to grow at a low single-digit rate, with volume declines offset by pricing and share gains in the US and Germany.
The first tranche runs through the bank until the 4th of May 2027 at the latest. The next dated event is full-year results on the 17th of November.
