MNI: GERMANY Q3 FINAL GDP 0.1% Q/Q (VS FCST 0.2%)

MNI: PBOC Net Drains CNY345.9 Bln via OMO Friday

MNI BRIEF: Japan Oct Core CPI Rises 2.3%, Services Rise

MNI BRIEF: Fed Should Explore Central Clearing At SRF-Hammack

MNI China Daily Summary: Thursday, November 21

MNI BRIEF: China To Enhance Support For Foreign Trade - MOFCOM

MNI: UK OCT RETAIL SALES -0.7% M/M, +2.4% Y/Y

MNI: UK NOV GFK CONSUMER CONFIDENCE INDEX -18

MNI JAPAN OCT CORE CPI +2.3% Y/Y; SEPT +2.4%

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

MNI EXCLUSIVE: German Turmoil Dashes EU's Joint-Funding Hopes -Officials

FED: Powell's Time Looks Up, Replacement Could Be Less Willing To Cut Rates?

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

CONSUMER STAPLES: Imperial Brands (IMBLN; Baa3 Pos/BBB/BBB) FY trading update

CONSUMER STAPLES
BulletCredit Bullets

'Technically' the first look from a tobacco on Q3 conditions- but it's pre-FY results trading update with limited financials (PM is next on the 22nd). Perhaps somewhat reassuringly to the sector it seems to be doing fine while running flat market share trends YTD. We do expect a Moody's upgrade but please be aware co is well behind peers in investing in growth segment (it refers to them as NGP/next-gen products). Boosted equity pay-outs instead of attempting to play catch-up is not nice to see. We do not see the 15bps it gives over BAT31s - who has a higher ~17% exposure to NGPs and is ~3x the size - as sufficient for the increased combustibles exposure. Similar issue in £.

  • Adj. EBIT growth has improved in 2H (+2.8% in 1H) - as it expected. It has therefore left FY guidance unch for MSD growth in constant currency terms. The FX headwind to EBIT has increased from 3-3.5% to now 4%. Net its guidance is still pointing to ~1% growth.
  • Strong growth in NGP (expects net revenue in +20-30% constant currency) with further reduction in operating loses (was -£50m loss in 1H and makes up a small 4% of group revenues).
  • Expects leverage to remain at lower end of net 2-2.5x range (vs. 2.5x at 1H, 1.9x at FY23). We do expect a Moody's upgrade (we see gross eqv. to 2.8x at lower end of target vs. upgrade threshold of <3x) particularly given NGP is showing strong growth.
  • Maintaining stable market share at group; re. 5 priority markets gains in USA, Spain & Australia offsetting declines in Germany & UK (unch from 1H).
  • Equity returns boosted; FY24 annual dividend by +4.5% to £1.53/share (~£1.3b or a ~7.14% yield). That is on top of a £1.1b buyback it did this year (total ~£2.4b). FY25 returns boosted to total £2.8b including £1.25b in buybacks.

Full results for the FY to Sept come on the 19th Nov.

318 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

'Technically' the first look from a tobacco on Q3 conditions- but it's pre-FY results trading update with limited financials (PM is next on the 22nd). Perhaps somewhat reassuringly to the sector it seems to be doing fine while running flat market share trends YTD. We do expect a Moody's upgrade but please be aware co is well behind peers in investing in growth segment (it refers to them as NGP/next-gen products). Boosted equity pay-outs instead of attempting to play catch-up is not nice to see. We do not see the 15bps it gives over BAT31s - who has a higher ~17% exposure to NGPs and is ~3x the size - as sufficient for the increased combustibles exposure. Similar issue in £.

  • Adj. EBIT growth has improved in 2H (+2.8% in 1H) - as it expected. It has therefore left FY guidance unch for MSD growth in constant currency terms. The FX headwind to EBIT has increased from 3-3.5% to now 4%. Net its guidance is still pointing to ~1% growth.
  • Strong growth in NGP (expects net revenue in +20-30% constant currency) with further reduction in operating loses (was -£50m loss in 1H and makes up a small 4% of group revenues).
  • Expects leverage to remain at lower end of net 2-2.5x range (vs. 2.5x at 1H, 1.9x at FY23). We do expect a Moody's upgrade (we see gross eqv. to 2.8x at lower end of target vs. upgrade threshold of <3x) particularly given NGP is showing strong growth.
  • Maintaining stable market share at group; re. 5 priority markets gains in USA, Spain & Australia offsetting declines in Germany & UK (unch from 1H).
  • Equity returns boosted; FY24 annual dividend by +4.5% to £1.53/share (~£1.3b or a ~7.14% yield). That is on top of a £1.1b buyback it did this year (total ~£2.4b). FY25 returns boosted to total £2.8b including £1.25b in buybacks.

Full results for the FY to Sept come on the 19th Nov.