(Adds analyst comment, background)
March 30 Imperial Brands, the world's
fourth-biggest tobacco company, repeated its full-year forecast
on Thursday, saying first-half performance was on track to meet
expectations, helped by foreign exchange gains.
The maker of Winston, Gauloises and other cigarette brands
said revenue and earnings per share were expected to be up
strongly for the six months ending March 31, driven by a 13 to
14 percentage point benefit from currency translation.
However, at constant currency rates, Imperial said it
expected lower revenue and profit in the first half, hurt by the
phasing in of a 300 million pound investment plan and a
deterioration in industry sales volumes, as previously guided.
Jefferies analysts said it would have been a big shock if
Imperial had not stood by its forecast, given that it had
already called for a particularly weak period, with organic
earnings before interest and tax (EBIT) down by a high
"To miss this would have raised serious questions," they
said, adding that Imperial's current share price does not factor
in the success of its new strategy and investment. Imperial said
early results of its investment programme were "encouraging"
with improved market share trends in many markets.
"We also see an increasing probability of a take-out over
the next 12 months," Jefferies said.
Imperial has long been seen as a target, particularly for
Japan Tobacco International. British American Tobacco's
recent deal to take over Reynolds American in
the United States has reignited speculation about further
(Reporting by Martinne Geller in London and Esha Vaish in
Bengaluru, editing by David Evans and Susan Thomas)