Imperial Brands PLC (LSE:IMB) launched a £1.45 billion share buyback and increased its dividend 4.5% as cigarette sales continued to generate strong cash flows and offset losses from ‘next generation’ products (NGPs) such as vapes.
However, these and other numbers were largely pre-released in an update from new CEO chief executive Lukas Paravicini last month, while the plan for the next five years was shared with investors under his predecessor back in March.
Net revenue from tobacco and NGPs increased 1.9% to £8.3 billion in the year to 30 September 2025, or 4.1% if currency swings are ignored.
Cigarette volumes were down 1.7% but this was more than offset by price increases, which drove net revenue growth of 3.7%. NGP net revenue rose 13.7% to £368 million, still a tiny portion of the total. This was driven by growth in nicotine pouches in the US and Europe.
Group adjusted operating profit rose 4.6% to £3.99 billion, with adjusted earnings per share up 9.1% to 315p.
On a reported basis, revenue declined 0.7% to £32.2 billion, with reported operating profit down 1.8% and reported EPS falling 16.5%.
The company declared a full-year dividend of 160.32p per share, up 4.5%, and announced the new buyback for 2026 after completing the last £1.25 billion programme.
Making this possible was free cash flow of £2.7 billion, while adjusted net debt also increased to £8.4 billion from £7.7 billion.
Paravicini, who started last month, said: “Our consistently strong operational and financial delivery provides a firm platform on which to build as we embark on the next phase of our strategy.”
Our performance in FY25 adds to our track record of consistent growth, demonstrating the sustainability of our tobacco business and the exciting growth opportunities in next generation products.”
He added: “During the next strategic period, we will evolve the distinctive challenger approach which has underpinned our recent success. This means we will continue to invest in consumer insights, innovation and marketing capabilities. We will also continue to make deliberate, focused choices about which opportunities we pursue, and develop a simpler, more efficient and more agile organisation.”
For the new financial year, he said the expectation is low-single-digit tobacco and double-digit NGP net revenue growth, with pricing continuing to offset cigarette volume declines.
Adjusted operating profit is forecast to rise 3% to 5%, supporting at least high-single-digit adjusted earnings per share growth.
