By John Fox-Clinch
Bristol-based Imperial Tobacco today said combined volumes of its Davidoff, Gauloises Blondes and West brands were up 2% in the nine months to June 30 while its Spanish business is now likely to deliver a better performance than expected.
“We grew volumes of our global strategic cigarette brands with good performances in emerging markets and we also achieved further excellent progress with JPS (John Player Special),” chief executive, Alison Cooper said in a trading update to the City.
“We made strong fine cut tobacco gains in a number of EU markets and we also increased volumes of our luxury Cuban cigars, despite difficult conditions in Spain,” Ms Cooper added.
Cigarette prices were reduced in Spain in May and June as a result of various brands being repositioned, significantly affecting market profitability.
On July 2, however, the company increased prices across its portfolio and – based on prices yesterday – it now estimates that adjusted operating profits derived from Spain for the financial year to September 30 could reduce by up to £70m – an improvement against its previously announced expectations of £110m. Of this, up to £20m represents a one-off non-recurring impact on its logistics business, an improvement against the June 13 expectation of £40m.
“We are well placed to build on our sales growth momentum in the remainder of the year, which supported by our ongoing focus on costs and effectively using our cash, will enable us to continue maximising value for our shareholders,” added Ms Cooper.