(Adds new savings target, CEO comments, analysts' estimates)
LONDON May 3 Lower tobacco sales and increased
investment weighed on half year profit and revenue for Britain's
Imperial Brands although the company said it remained on
track to meet annual expectations at constant exchange rates.
The maker of cigarette brands including Gauloises, Winston
and Kool has spent 160 million pounds ($207 million) of the 300
million pounds earmarked this year for a plan aimed at improving
results in the longer term.
It intends to simplify its cigarette portfolio by migrating
smokers from weaker brands to stronger ones, improve
distribution and boost marketing. It said early results of the
plan were encouraging, and that its most important brands were
gaining market share.
Imperial and its rivals are jockeying for position in the
market for e-cigarettes as traditional tobacco sales decline in
the face of growing health concerns and regulation, such as the
law requiring "plain packaging" that has just gone into effect
in Britain. France is instituting a similar rule.
Imperial is also testing products that deliver caffeine
instead of nicotine.
The company said on Wednesday net revenue in its tobacco
business was 3.72 billion pounds, up 9.3 percent in the six
months to March 31 and in line with forecasts. However,
excluding the impact of exchange rates, revenue fell 5.5
Total adjusted operating profit was 1.74 billion pounds, up
6.3 percent. Excluding the impact of exchange rates, it was down
The amount of tobacco Imperial sold in the half year fell
5.7 percent, due to a slowdown across the industry.
Imperial Chief Executive Alison Cooper told reporters that
she didn't expect "a particularly significant domino effect" in
terms of different markets adopting plain packaging.
Imperial had gained market share and revenue in Australia,
the only market that has had the rule - which bans colours and
logos on cigarette packs - for some time.
The company also said its cost-savings plan would result in
savings of 130 million pounds this year, ahead of the 90 million
pounds it announced in November.
($1 = 0.7759 pounds)
(Reporting by Martinne Geller; Editing by Susan Fenton/Keith