Imperial ups divi after meeting full-year forecasts

Profit growth at Imperial Tobacco was broadly in line with expectations in the year to the end of September, helping the firm to raise its dividend payout ratio and increase its full-year payout by over a tenth.

Profit growth at Imperial Tobacco was broadly in line with expectations in the year to the end of September, helping the firm to raise its dividend payout ratio and increase its full-year payout by over a tenth.

Tobacco net revenue in the 12 months to September 30th increased by 1% from £6,913m to £7,005m, a 4% increase on a constant currency basis. Growth in the company's 'key strategic brands' (Davidoff, Gauloises Blondes, West and JPS) was much better though at 13%.

Group adjusted operating profit increased by 2% (up 4% at constant currency) from £3,103m to £3,161m, while adjusted earnings per share rose 7% (up 8% constant currency) from 188.0p to 201.0p.

Meanwhile, stick equivalent volumes fell by 2.7% from 346.0bn to 336.6bn. The majority of the decline was due to "ongoing market weakness in Ukraine and Poland and compliance with international trade sanctions in Syria," the company said.

The 'key' brands reported volume growth of 7% - these now account for 30% of total stick equivalent volumes, up from 26% in 2010.

The group has increased its dividend payout ratio to 52.5% of adjusted earnings per share and is recommending a final dividend of 73.9p per share, bringing the total payout to 105.6p per share, up 11% year-on-year.

"We're generating high quality growth by investing in total tobacco brands that will deliver long-term sustainable sales. Revenues were strong across the portfolio and I'm particularly pleased with the excellent performances from our key strategic brands [...]," said Chief Executive Alison Cooper.

"Our portfolio offers consumers unrivalled choice and provides significant opportunities for further growth. Our focus on realising this growth potential, whilst effectively managing cost and cash, will continue to maximise value for our shareholders."

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