March 30, 2017 / 7:26 AM / 5 months ago

UPDATE 1-Imperial Brands sticks to full-year guidance, forex gains help

(Adds analyst comment, background)

March 30 (Reuters) - 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 single-digit rate.

"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 industry consolidation.

Reporting by Martinne Geller in London and Esha Vaish in Bengaluru, editing by David Evans and Susan Thomas

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