Why Is Imperial Brands Up Today?

Imperial Brands PLC (LSE:IMB) shares rose 1.49% to 2,933.0p today, a gain of 43.0p on the session. The tobacco and next generation products group remains in focus following its trading update for the 2026 financial year, which included a new share buyback.

Tobacco net Revenue grew by a low single-digit percentage, marking a sixth consecutive year of growth, while Next Generation Products net revenue grew by double digits.

About Imperial Brands PLC

Imperial Brands PLC is an international fast-moving consumer goods company with a portfolio of tobacco and next generation products. Its brands include Davidoff, West, Gauloises, JPS and Winston in tobacco, and blu, Zone, Skruf and Pulze in next generation products.

LSE:IMB has a 0.84% weighting in the FTSE 100 and a Market Capitalisation of about £21.8 billion. The group sells in more than 160 markets, with a focus on a defined set of priority markets.

Tobacco Performance

Tobacco net revenue growth was supported by pricing and share gains in the United States and Germany, which helped offset a low single-digit decline in group volumes. The company has focused on a small number of markets and brands to maximise returns.

Next Generation Products

Next Generation Products net revenue grew by double digits, with category share gains in all three segments. In heated products, the Pulze 3.0 rollout and iD sticks contributed, while blu kits supported vapour. In modern oral, Zone and Skruf grew, and the acquisitions of Black Buffalo in the United States and Helwit in Sweden added to the portfolio.

Guidance for FY26

At constant currency, management expects adjusted operating profit growth of 3% to 5% and high single-digit growth in adjusted earnings per share. Free Cash Flow is expected to exceed £2.2 billion, and net Debt to EBITDA is expected at the lower end of the 2.0 to 2.5 times range.

Share Buyback

The £1.45 billion buyback announced in October 2025 has been completed. A new £1.5 billion buyback for the 2027 financial year is due to finish by 29 October 2027. About £13 billion has been returned to shareholders over the 2021 to 2026 financial years, and issued Share Capital has fallen by more than 21% since October 2022.

Cost Programme

The company is targeting structural cost savings of at least £320 million by 2030, including a £100 million reduction in overheads. Efficiency gains can help fund Brand Investment and support margins over time.

Why Portfolio Focus Matters

By concentrating on priority markets and a smaller set of brands, Imperial can direct investment where it expects the best returns. Pricing, distribution and innovation play a central role in tobacco, while next generation categories offer a path to meeting evolving adult consumer preferences.

Adult consumers are increasingly choosing smokeless alternatives in some markets, and the group's development of heated, vapour and modern oral products allows it to participate in that shift.

Cash and Dividends

The company follows a progressive Dividend policy, and cash generation supports both distributions and buybacks. Free cash flow above £2.2 billion gives the group flexibility to continue investing in its brands and reducing debt.

Responsible Business

Imperial reports on sustainability, including steps to reduce emissions and improve Supply chain standards, and it works with regulators on responsible Marketing and product standards. Its next generation products are positioned as reduced-harm alternatives for adults who would otherwise continue to smoke.

Market Priorities

Imperial focuses on a defined set of priority markets, including the United States and Germany, where it has established brands and distribution. Concentrating investment on these markets allows the company to support its brands consistently and to pursue share gains where returns are most attractive.

Factors to Monitor

Investors following LSE:IMB may watch full-year results due on 17 November 2026, next generation product share gains, pricing in priority markets, progress of the buyback and cost savings delivery.

Conclusion

Imperial Brands PLC rose 1.49% to 2,933.0p today following a trading update showing a sixth year of tobacco revenue growth, double-digit growth in Next Generation Products and a new £1.5 billion buyback. Focus and cash generation remain central themes. Future company announcements should provide further detail on operating progress, capital allocation and management priorities.