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Highlights

  • NGP net revenue rose by 15.4%, with growth reported across all product categories.
  • Market share increased in three out of five key markets, including the US and Germany.
  • £1.25 billion share buyback programme and interim dividend increase implemented.

Imperial Brands PLC (LSE:IMB) has released its financial results for the six months ended 31 March 2025, reporting earnings in line with its full-year guidance. The company recorded modest growth in its adjusted earnings and continued to return capital to shareholders while managing the effects of declining tobacco volumes and a challenging operating environment.

In its five priority markets, Imperial Brands reported a 6 basis point increase in aggregate market share, exceeding its stated objective to maintain existing share levels. Gains in the United States (+10 bps), Germany (+65 bps), and Australia (+5 bps) offset reductions in the UK (-70 bps) and Spain (-90 bps).

Tobacco net revenue increased by 2.7% on a constant currency basis, driven largely by pricing actions, while overall volumes declined by 3.2% to 87 billion stick equivalents. The company cited widespread market size contraction across its footprint as a key factor behind the volume trend.

Revenue from NGP comprising modern oral, vapour, and heated tobacco grew by 15.4%, with each category contributing to the increase. Gains were primarily concentrated in the US and Europe, while sales in the AAACE (Africa, Asia, Australasia, Central & Eastern Europe) region were affected by temporary disruptions.

Adjusted operating losses from NGP were reduced by 14.0% to £43 million, although reported losses increased due to higher amortisation charges and exchange rate impacts. The company continued expanding its modern oral brand Zone in the US and introduced additional formats in its heated tobacco line in Europe.

Group adjusted operating profit increased by 1.8% on a constant currency basis, while adjusted earnings per share (EPS) rose by 6.0%, supported by a reduction in the share count from the ongoing buyback programme. Reported EPS rose marginally by 0.7%.

Cash conversion over the past 12 months remained high at approximately 99%, leading to free cash flow of £2.4 billion. Adjusted net debt stood at £10 billion, with the Group’s net debt-to-EBITDA ratio improving to 2.4x. The company reiterated its aim to reduce this figure to around 2.0x by the end of the year.

In line with plans shared in October 2024, Imperial began rephasing its dividend payments into four equal instalments per year. As a result, the interim dividend rose by 78.5% to 80.16 pence, a figure that includes a 4.5% underlying increase and a one-off uplift due to timing changes.

In addition to dividends, the Group has committed to returning £1.25 billion to shareholders this year through share repurchases. Cumulative capital returns between FY21 and FY25 are expected to total around £10 billion approximately 67% of Imperial’s market capitalisation at the beginning of 2021.