Imperial Brands (LSE:IMB) PLC said the lifting of Coronavirus (COVID-19) restrictions will hit cigarette sales, which were helped by a change in consumer buying patterns during the pandemic.
Group net revenue is expected to grow by around 1%, driven by continued strong pricing in tobacco.
The combustible business is expected to see market share dipping slightly in the group’s five key markets, so it’s boosting investment to improve performance in those areas.
Tobacco volumes are in line with expectations and total group cigarette market share is expected to grow 0.2%.
In the Next Generation Products (NGP), which includes heated tobacco products, second-half revenue is expected to be at a similar level to the first half.
That’s because the FTSE 100 group exited certain markets to focus on categories that had the best potential for growth.
It’s now trialling its heated tobacco products in the Czech Republic and Greece, alongside a new marketing initiative for its vapour product, blu, in North Carolina.
Group adjusted organic operating profit growth is expected to be in line guidance, reflecting significantly reduced losses in NGP and higher distribution profit.
Adjusted operating profit for the tobacco business will be slightly lower due to higher investment, lower stock revenue/profit in Australia and US state litigation settlement costs.
Shares dipped 1% to 1,530.5p on Wednesday morning.