19th August 2015
As Imperial Tobacco Group reports its third quarter results this morning, Ian Forrest, investment research analyst at The Share Centre, explains what they mean for investors…
Imperial Tobacco today reported that a solid third quarter performance means it is on track to meet market expectations for its full year results. Investors will also be pleased to note that the group mentioned plans to deliver a further 10% increase in its dividend payments for the year.
Overall tobacco revenues were flat in the first nine months but Imperial’s global growth brands, including West and Davidoff, continued to make progress with revenues up 14% and market share up 10%. The integration of US assets acquired as part of the Reynolds American-Lorillard merger is going to plan, whilst cost-cutting measures are due to raise £85m this year.
This morning’s results show good grading from Imperial and show a continuation of the progress made in the first half. We are maintaining our ‘buy’ recommendation for medium risk income-seeking investors. This is due to the very healthy dividend, excellent track record of dividend growth, the success of alternative products such as e-cigarettes, and the possible revenue boost in future from improving US-Cuba trade relations.