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Imperial Brands Half Yearly Report

Practical discussions about equity High-Yield Portfolios (HYP) for income
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idpickering
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Imperial Brands Half Yearly Report

#220097

Postby idpickering » May 8th, 2019, 7:05 am


On Track to Deliver FY19

· Net revenue up +2.5% driven by strong NGP growth and a good underlying tobacco performance

· Tobacco benefiting from strong price/mix while volumes temporarily affected by shipment timings

· NGP revenues of £148m (£158m pre IFRS 15) up +245% with growth in Europe, the US and Japan

· Quality growth from Asset Brands with net revenue up 7.0%; +280bps as percentage of net revenue

· Good growth in tobacco profitability driven by the Americas and Europe

· Adjusted operating profit reflects additional £94m gross NGP investment & £40m profit on OTP disposal last year

· Reported operating profit up 38.1% with lower amortisation, the prior year impact of distributor administration, lower restructuring costs and an increase in the contingent consideration liability for the Von Erl acquisition

· On track to deliver growth in revenue, adjusted EPS and cash conversion in line with full year expectations

· Divestment programme on track

And later;

Dividends

We have declared an interim dividend of 62.56 pence per share, an increase of 10 per cent. This dividend will be paid in two payments of 31.28 pence per share on 28 June 2019 and 30 September 2019, with an ex-dividend date of 23 May and 22 August respectively.

The third interim and final dividends will be announced with our full year results in November 2019 and paid in December 2019 and March 2020 respectively, subject to AGM approval. We expect to deliver another year of 10 per cent dividend growth.



https://www.investegate.co.uk/imperial- ... 00023370Y/

Walrus
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Re: Imperial Brands Half Yearly Report

#220110

Postby Walrus » May 8th, 2019, 8:24 am

idpickering wrote:

On Track to Deliver FY19

· Net revenue up +2.5% driven by strong NGP growth and a good underlying tobacco performance

· Tobacco benefiting from strong price/mix while volumes temporarily affected by shipment timings

· NGP revenues of £148m (£158m pre IFRS 15) up +245% with growth in Europe, the US and Japan

· Quality growth from Asset Brands with net revenue up 7.0%; +280bps as percentage of net revenue

· Good growth in tobacco profitability driven by the Americas and Europe

· Adjusted operating profit reflects additional £94m gross NGP investment & £40m profit on OTP disposal last year

· Reported operating profit up 38.1% with lower amortisation, the prior year impact of distributor administration, lower restructuring costs and an increase in the contingent consideration liability for the Von Erl acquisition

· On track to deliver growth in revenue, adjusted EPS and cash conversion in line with full year expectations

· Divestment programme on track

And later;

Dividends

We have declared an interim dividend of 62.56 pence per share, an increase of 10 per cent. This dividend will be paid in two payments of 31.28 pence per share on 28 June 2019 and 30 September 2019, with an ex-dividend date of 23 May and 22 August respectively.

The third interim and final dividends will be announced with our full year results in November 2019 and paid in December 2019 and March 2020 respectively, subject to AGM approval. We expect to deliver another year of 10 per cent dividend growth.



https://www.investegate.co.uk/imperial- ... 00023370Y/


I have a genuine suspicion that buying these during the lows will be one of the best decisions I have made. Vodafone on the other hand...... Less convinced

idpickering
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Re: Imperial Brands Half Yearly Report

#220111

Postby idpickering » May 8th, 2019, 8:27 am

Walrus wrote:
I have a genuine suspicion that buying these during the lows will be one of the best decisions I have made. Vodafone on the other hand...... Less convinced


I was thinking the same, on both fronts.

Ian.

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Re: Imperial Brands Half Yearly Report

#220112

Postby Arborbridge » May 8th, 2019, 8:48 am

idpickering wrote:
Walrus wrote:
I have a genuine suspicion that buying these during the lows will be one of the best decisions I have made. Vodafone on the other hand...... Less convinced


I was thinking the same, on both fronts.

Ian.


On the other hand.....

Tobacco could fall from grace as it's a dying industry, and VOD could do the opposite as data providers have a bright future :lol: :lol:

Diversity lives, OK!

Arb.

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Re: Imperial Brands Half Yearly Report

#220115

Postby kempiejon » May 8th, 2019, 8:54 am

It seems unlikely that the tobaccos could have a yield of over 10% but if they keep increasing at a similar rate each year unless the share price appreciates the dividend must at least be held sooner of later. I've seen IMB yield double in little more than a couple of years, the price is below 2014 levels when the dividend was about 116p, my guess for this year or next is over £2 dividend.

Although this could be an opportunity I won't be relaxing my concentration or diversity limits to over do it though.

idpickering
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Re: Imperial Brands Half Yearly Report

#220118

Postby idpickering » May 8th, 2019, 9:11 am

kempiejon wrote:It seems unlikely that the tobaccos could have a yield of over 10% but if they keep increasing at a similar rate each year unless the share price appreciates the dividend must at least be held sooner of later. I've seen IMB yield double in little more than a couple of years, the price is below 2014 levels when the dividend was about 116p, my guess for this year or next is over £2 dividend.

Although this could be an opportunity I won't be relaxing my concentration or diversity limits to over do it though.


That is my issue with IMB. I have spent enough there already, and don't want to continue grasping at that falling knife. I'm 10% down in capital value terms, which is surprising to me. I'm going to continue to hold, and enjoy the dividend on offer.

Ian.

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Re: Imperial Brands Half Yearly Report

#220121

Postby Dod101 » May 8th, 2019, 9:21 am

I suspect that this is probably the classic dividend trap. As a very long term holder, I am delighted that they are continuing to increase the dividend by 10% but they cannot do this for ever, by which I mean for each of say the next 10 years..........or can they? I would not add to them because this year is not typical any more than last year was but is any year? Maybe a closer examination of the figures will give a better and more meaningful picture.

Meanwhile enjoy the dividend! But I worry about the capital loss even if some dedicated HYPers would not.

Dod

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Re: Imperial Brands Half Yearly Report

#220124

Postby tjh290633 » May 8th, 2019, 9:26 am

As I've held IMB from the time when Imperial Tobacco demerged from Hanson, in 1996, and have taken profits several times, plus sold the rights, my average cost is negative, despite more recent additions. The last time I trimmed, in 2016, the price was just under £36. The latest increase in dividend has put their share of income up to the extent that adding more is now ruled out.

Looking at the overview figures at the top of the RNS, actual earnings were 115.6p/share and the dividend is 62.56p/share for the half year. The operating profit is reported as up 37.7%. Adjusted profits somewhat less. There seems to be little chance that the full year dividend will not be increased by the anticipated 10%.

TJH

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Re: Imperial Brands Half Yearly Report

#220126

Postby idpickering » May 8th, 2019, 9:30 am

Alison Cooper IMB CEO interview on Bloomberg interview extract here;

Imperial Brands Sees Profit Boost From Vaping in Coming Years

Imperial Brands Plc Chief Executive Officer Alison Cooper said she expects vaping products to contribute to profit in coming years amid surging sales of cigarette alternatives like its Blu brand.

“Next-generation products are not that far away in terms of adding to the bottom line,” she said in a phone interview Wednesday. The maker of West cigarettes reported a 1.1 percent increase in first-half earnings per share, driven by its traditional tobacco offerings.


https://www.bloomberg.com/news/articles ... ium-Europe

IMB down 2.8% as I type.

Ian.

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Re: Imperial Brands Half Yearly Report

#220127

Postby Dod101 » May 8th, 2019, 9:32 am

I am in the same boat as TJH in that I have long since extracted my original costs and more so my capital loss is purely a 'paper' one. Still do not like it much though.

Dod

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Re: Imperial Brands Half Yearly Report

#220134

Postby bluedonkey » May 8th, 2019, 10:28 am

Dividend 62.56p per share, adjusted EPS 115.6p but basic EPS - surprise - a lot less at 71.2p. If I get time I'll review the 5 year record of basic v. adjusted EPS.

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Re: Imperial Brands Half Yearly Report

#220140

Postby spiderbill » May 8th, 2019, 10:47 am

idpickering wrote:That is my issue with IMB. I have spent enough there already, and don't want to continue grasping at that falling knife. I'm 10% down in capital value terms, which is surprising to me. I'm going to continue to hold, and enjoy the dividend on offer.


Timing has been everything with IMB. I had the misfortune/mistake to buy mostly in 2016/17 and am sitting on a 35% capital loss, which will take years of dividends to compensate for. Hard to believe that such a HYP stalwart with such a profitable business has lost me more than Petrofac with all its SFO troubles. The time to buy wasn't then!
Shows how easy it is for apparently good shares to bite you.

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Re: Imperial Brands Half Yearly Report

#220146

Postby monabri » May 8th, 2019, 11:05 am

A 'modest' 8.7% based on 193.8p divi and a share price of 2215p (down 4.8% today).

FWIW I agree strongly with spiderbill regarding timing (and PFC, which I also hold, looks quite good by comparison).

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Re: Imperial Brands Half Yearly Report

#220157

Postby Dod101 » May 8th, 2019, 11:29 am

bluedonkey wrote:Dividend 62.56p per share, adjusted EPS 115.6p but basic EPS - surprise - a lot less at 71.2p. If I get time I'll review the 5 year record of basic v. adjusted EPS.


That is what I was meaning because there are a lot of exceptionals in these results. Even a superficial reading of the press release tells us that. I would not add to them. At least some of today's drop in price is surely down to sentiment over Trump and his threatened trade wars.

Dod

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Re: Imperial Brands Half Yearly Report

#220158

Postby idpickering » May 8th, 2019, 11:32 am

monabri wrote:A 'modest' 8.7% based on 193.8p divi and a share price of 2215p (down 4.8% today).

FWIW I agree strongly with spiderbill regarding timing (and PFC, which I also hold, looks quite good by comparison).


Thank you both. There is a temptation to have one more bite at the cherry. I’m reminded of Warren Buffett’s rule number one, don’t lose money. ;) However, no one can tell the future of any share, and we’re evidence of that. The bottom line though, is that I bought the share all those years ago, and have topped up since, for the income. Currently it’s doing just that so I shall just hold on.

Ian.

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Re: Imperial Brands Half Yearly Report

#220162

Postby Arborbridge » May 8th, 2019, 11:48 am

idpickering wrote:
monabri wrote:A 'modest' 8.7% based on 193.8p divi and a share price of 2215p (down 4.8% today).

FWIW I agree strongly with spiderbill regarding timing (and PFC, which I also hold, looks quite good by comparison).


Thank you both. There is a temptation to have one more bite at the cherry. I’m reminded of Warren Buffett’s rule number one, don’t lose money. ;) However, no one can tell the future of any share, and we’re evidence of that. The bottom line though, is that I bought the share all those years ago, and have topped up since, for the income. Currently it’s doing just that so I shall just hold on.

Ian.


Unfortunately, WB never quite explains how to obey to Rule 1!

Arb.

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Re: Imperial Brands Half Yearly Report

#220165

Postby kempiejon » May 8th, 2019, 12:04 pm

Arborbridge wrote:
Unfortunately, WB never quite explains how to obey to Rule 1!

Arb.

And I think that's applied on the total investment, on a per investment basis I'm sure he lost millions on Heinz-Kraft and didn't he bail from Tesco at well below purchase price. It's a good rule mind.

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Re: Imperial Brands Half Yearly Report

#220196

Postby Gostevie » May 8th, 2019, 2:16 pm

I've never held these before but pick up some today at 2215p inc. costs.

I do take the point about the adjusted eps but at the current share price and yield, temptation got the better of me.

Gostevie

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Re: Imperial Brands Half Yearly Report

#220204

Postby Bouleversee » May 8th, 2019, 3:37 pm

Having avoided tobacco for many years, I also bought at the wrong time and am down a lot. I see they are down over 7% today despite the ever increasing high yield. Where will it end? I haven't got a massive holding so debating whether to add but finding it difficult to screw up sufficient courage.

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Re: Imperial Brands Half Yearly Report

#220207

Postby Arborbridge » May 8th, 2019, 3:59 pm

There's certainly another lesson here in "nothing is for ever". I am also down, about 14% - and that's over nine years of holding and occasionally adding.

So where is the worm in the apple, and will it be found before our apple collapses?

Once more, we cannot stress diversity enough - and do not fall in love with any particular share.


Arb.


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