Imperial Brands backs outlook as ‘robust’ pricing offsets tobacco decline

The Bristol-headquartered maker of Golden Virgina is continuing to focus on tobacco-free products

Tobacco giant Imperial Brands has reiterated its guidance for the full year amid a “more uncertain” geopolitical and macro environment. The announcement on Tuesday comes as the business looks to focus on tobacco-free products as smoking rates continue to decline.

The Golden Virginia maker said its “robust” pricing and continued investment in next-generation products (NGP) means it expects low-single-digit growth in tobacco and NGP net revenue for the first half. Imperial said its tobacco performance was underpinned by pricing and only a modest volume drop in combustibles.

Group adjusted operating profit is expected to be slightly ahead year-on-year for the first half, and is likely to be stronger in H2, the business added.

Imperial also said that while the conflict in the Middle East had caused “no material business impact to date”, the situation remained “uncertain”.

“We are pleased to report a good start to our 2030 strategy, with strong momentum behind our execution and our transformation towards becoming a more consumer-centric, data led, agile and efficient challenger,” a statement to the stock market said.

“During the first half, we began the implementation of our new long-term partnership with Capgemini and took further action to focus on our supply chain footprint, while continuing the rollout of our enterprise IT applications.”

Imperial Brands’ interim results for the six months ended March 2026 will be announced on May 12.

Derren Nathan, head of equity research at investment platform Hargreaves Lansdown, said: “Imperial Brands’ tobacco volumes declined again in the first half, but that’s to be expected as more smokers kick the habit and non-combustible alternatives continue their expansion.

“Low single-digit reductions are on the manageable side. In the meantime, revenue has grown modestly, supported by robust pricing and a mid-to-high digit percentage rise in sales of next generation products. With full-year guidance intact, Imperial is setting out its stall as a strong defensive investment, and despite a note of caution, it has seen no material business impact from this year’s tumultuous geopolitical events.”

The latest trading update comes just a day after the company confirmed it would launch the second tranche of its ongoing share buyback scheme. The business told investors on Monday that it intends to repurchase stocks worth £725m as part of a wider £1.45bn programme announced last year.