Imperial Brands PLC (LON:IMB) makes a year-end update on Thursday with shareholders and analysts thinking about its near 10% dividend yield and how sustainable it is under new chief executive officer Stefan Bomhard.
Bomhard, who joined three months earlier than Tesco’s Murphy, was not climbing aboard a steady ship, taking over after a tough year for the tobacco giant that included a pair of profit warnings, a dividend cut and the scrapping of its long-time dividend growth target, not to mention the stubbing out of former boss Alison Cooper.
Investors will hope Bomhard, who joins from executive roles at car dealer Inchcape, Bacardi, Cadbury and Unilever, will be able to confirm the guidance at May’s first-half results, of market share gains in tobacco but flat revenue growth at best, less than the originally hoped 50% growth in next-generation products and a single-digit percentage fall in adjusted earnings per share (EPS).
The current analysts’ consensus forecast is looking for adjusted EPS of 255.1p, down 7% from 273.7p a year ago.
Analysts at Liberum noted that Bomhard had led “transformation change” at Inchcape and contributed to the cultural change, including disposing of a large business, “which may foreshadow Imperial's reopening of the disposal programme”.
Recently, analysts at RBC Capital Markets suggested Imperial could, if it was minded, buy back its whole current market value in seven years.
CMC upgrade factory
On Thursday, a company that has had a rather better time of it this year, CMC Markets PLC (LON:CMCX), which is releasing a trading update just over a month after raising market expectations for the second time since the start of the current financial year.
Investors are wondering if the trading platform operator is about to make it three times, having experienced strong activity throughout the pandemic.
The higher revenue performance was driven by existing clients trading more as well as the platform continuing to attract new clients. However, it led to an increase in variable operating costs, predominantly driven by higher client onboarding costs and the more efficient acquisition of new clients.
“At this juncture, there is every chance that full-year numbers, already having been significantly upgraded, could prove conservative, as volatility remains elevated,” said broker Peel Hunt. “Looking beyond this year, there is still a huge opportunity for CMC to leverage the platform and drive incremental revenues.”
Thursday 8 October
Trading announcements: Imperial Brands PLC (LON:IMB), Countryside Properties PLC (LON:CSP), CMC Markets PLC (LON:CMCX), Electrocomponents PLC (LON:ECM), Motorpoint Group PLC (LON:MOTR), Robert Walters PLC (LON:RWA)
Economic data: US jobless claims