Imperial Brands PLC (LSE:IMB) has launched a £1bn share buy-back programme as the cigarette maker updated investors on trading which it said is in-line with expectations.
Total capital returns for the full year, including dividends and share buy-backs, are expected to top £2.3bn the FTSE 100 tobacco group said, around 13% of its current market value.
Chief executive Stefan Bomhard said: "The launch of our new buyback programme is an important milestone in our five-year strategy announced in January 2021.
“We are committed to a progressive dividend and an ongoing buyback programme to meaningfully reduce the capital base over time."
Trading has been in with expectations, the company said, with (at constant currency) the growth rate of tobacco net revenue up in the second half driven by a stronger price mix.
As expected, the recovery of international travel has, over the course of the year, led to a return to pre-COVID purchasing patterns which led to increased volume declines, particularly in Northern Europe, partly offset by volume growth in Southern Europe and duty-free.
Imperial said it expects full-year net revenue and group adjusted operating profit to both grow by around 1% at constant currency rates and forecast low single-digit constant currency net revenue growth over the next three years.
Operating profit growth, adjusted at constant currencies, is expected to accelerate to deliver a mid-single digit compound average growth rate over the three years, it said.
Gearing levels are expected to remain at the lower end of the group’s EBITDA range of 2.0-2.5 times, while capex is seen around £300mln to £350mln per annum.