Imperial Brands Trading Statement

[Gengulphus]

I don't see how the big players such as Imperial Brands can make any serious money from vaping. In the case of IMB they have Fontem Ventures but I can't for the life of me see how they can make anything more than pocket money. The market is full of hundreds of different vaporisers and supplies of 'eliquid' can be bought very cheaply is bulk quantities. I just can't see how they can obtain a competitive advantage, but I may be missing something!

Possibly that regulation of the vaping market is still in its infancy? If vaping really takes off, you can safely bet that governments will want to regulate and tax the vaping market - something that will be a lot easier for an existing big player to deal with than a newcomer without the economies of scale to be able to afford extensive safety testing, the existing systems for dealing with the taxation, etc. And if vaping doesn't really take off, the existing big players will still have the smoking market...

Gengulphus

[monabri]

According to Wiki (e-cigarettes and it's "inventor")

" Imperial Tobacco acquired the intellectual property owned by (Mr.) Hon Lik through Dragonite for $US 75 million"

Seems like a relatively small sum of money for the likes of IMB to hedge their bets (when you consider it relative to the c.£1300m annual dividend).

[dspp]

Apropos peak anything, it is as well to remember that 40 or so years ago people feared that peak oil was just around the corner, and we would have to revert to coal, or even wood, as a prime source of energy.

As regards the tobacco industry, I seem to recall that globally consumption of cigarettes is actually growing. Add to that vaping in its various forms is a growth field in the health conscious or hypochondriac areas. They are not going away right now.

TJH

We may have seen a short-term peak in oil production back in 2007. Arguably since then the shale oil production (and KSA response) has been a colossal sub-economic Ponzi scam that is polluting the data set. Personally I think any investments in oil from here on are picking up pennies in front of steam rollers - though at this stage quite attractive pennies and quite distant steam rollers which is why I remain heavily invested in the sector.
https://www.bp.com/en/global/corporate/ ... ction.html

Regarding tobacco consumption many people think that it is growing. The data I linked to in my post on 29/9/17 suggests that it is diminishing since a peak in ?? 2009 ??. There were three separate sources I linked to. What is notable is how little good quality data is available on this subject that I have been able to track down. I would be grateful if anyone can come up with better quality global data. What is also worth noting is that government intervention can quickly reduce tobacco consumption in key countries, much faster than the corresponding moves away from fossil fuels are possible. Good data makes for good decisions. Where is the good data and why is it so difficult to locate ?

regards, dspp

[77ss]

According to Wiki (e-cigarettes and it's "inventor")

" Imperial Tobacco acquired the intellectual property owned by (Mr.) Hon Lik through Dragonite for $US 75 million"

Seems like a relatively small sum of money for the likes of IMB to hedge their bets (when you consider it relative to the c.£1300m annual dividend).

True, but if you are looking at how much IMB is spending to hedge its bets, you should look at the Reynolds/Lorillard acquisition back in 2015 - for £4,613m.

One of the major drivers, IIRC, was getting the US e-cig brand 'Blu'.

[BreakoutBoy]

I also don't see much profit in vaping, but the tobacco business is such a good one to be in I don't care!

I saw a statistic that while 80% of smokers have tried to quit, less than 10% actually succeed in quitting across a lifetime. That is good news for IMB holders, vaping or not, because most people who start the habit will continue to some degree, for life.

What IMB will need to do to sustain their business over the long term is get their cancer-sticks in the hands of the young. Smoking is to some degree an inherited practice, so IMB can rely on all those smoking parents imprinting their kids who then have a high chance of picking up the habit.

This is basic human behavioural programming, patterns formed in childhood are repeated later in life. I am confident that my dividend will be paid for many years to come by these unfortunates.

[idpickering]

I also don't see much profit in vaping, but the tobacco business is such a good one to be in I don't care!

I saw a statistic that while 80% of smokers have tried to quit, less than 10% actually succeed in quitting across a lifetime. That is good news for IMB holders, vaping or not, because most people who start the habit will continue to some degree, for life.

What IMB will need to do to sustain their business over the long term is get their cancer-sticks in the hands of the young. Smoking is to some degree an inherited practice, so IMB can rely on all those smoking parents imprinting their kids who then have a high chance of picking up the habit.

This is basic human behavioural programming, patterns formed in childhood are repeated later in life. I am confident that my dividend will be paid for many years to come by these unfortunates.

An interesting post BBB. I don't think encouraging your kids to smoke is a good parenting tactic though. Very much the opposite of it in fact. But then, what do I know? On a lighter (pun) note, it's my birthday!! 56 years old today.

Ian.

[Wizard]

This is basic human behavioural programming, patterns formed in childhood are repeated later in life. I am confident that my dividend will be paid for many years to come by these unfortunates.

I am convinced that taking in my Dad's second hand smoke and always having to sit in the thick fog of the smoking section of wherever we went ensured I would be a non-smoker. But I do hold IMB.

Terry.

[OLTB]

I also don't see much profit in vaping, but the tobacco business is such a good one to be in I don't care!

I saw a statistic that while 80% of smokers have tried to quit, less than 10% actually succeed in quitting across a lifetime. That is good news for IMB holders, vaping or not, because most people who start the habit will continue to some degree, for life.

What IMB will need to do to sustain their business over the long term is get their cancer-sticks in the hands of the young. Smoking is to some degree an inherited practice, so IMB can rely on all those smoking parents imprinting their kids who then have a high chance of picking up the habit.

This is basic human behavioural programming, patterns formed in childhood are repeated later in life. I am confident that my dividend will be paid for many years to come by these unfortunates.

An interesting post BBB. I don't think encouraging your kids to smoke is a good parenting tactic though. Very much the opposite of it in fact. But then, what do I know? On a lighter (pun) note, it's my birthday!! 56 years old today.

Ian.

My Dad was a smoker and it put me off for life. When our youngest was born, he gave up - he was 71. He said he wanted to be around and be able to play with him. He is still not smoking, but finds it a daily challenge!

Happy Birthday Ian! Have a great day and pop down to Greene King for some celebratory drinks (my HYP needs it)

Cheers, OLTB.

[idpickering]

I also don't see much profit in vaping, but the tobacco business is such a good one to be in I don't care!

I saw a statistic that while 80% of smokers have tried to quit, less than 10% actually succeed in quitting across a lifetime. That is good news for IMB holders, vaping or not, because most people who start the habit will continue to some degree, for life.

What IMB will need to do to sustain their business over the long term is get their cancer-sticks in the hands of the young. Smoking is to some degree an inherited practice, so IMB can rely on all those smoking parents imprinting their kids who then have a high chance of picking up the habit.

This is basic human behavioural programming, patterns formed in childhood are repeated later in life. I am confident that my dividend will be paid for many years to come by these unfortunates.

An interesting post BBB. I don't think encouraging your kids to smoke is a good parenting tactic though. Very much the opposite of it in fact. But then, what do I know? On a lighter (pun) note, it's my birthday!! 56 years old today.

Ian.

My Dad was a smoker and it put me off for life. When our youngest was born, he gave up - he was 71. He said he wanted to be around and be able to play with him. He is still not smoking, but finds it a daily challenge!

Happy Birthday Ian! Have a great day and pop down to Greene King for some celebratory drinks (my HYP needs it)

Cheers, OLTB.

Thank you OLTB. I remember my Dad used to smoke, and I couldn't stomach the smell. However I did dabble in my teens. Who didn't in some form or other? As for Greene KIng and drinks, they'd have to be alcohol free as I don't drink either lol.

To get back on topic though, I have zero concerns regarding my tobacco holdings. I just wish Imperial had performed as well as BATS on the capital value front. Not that that's important here.

Ian.

Ian.

[Dod1010]

When our youngest was born, he gave up - he was 71.

As long as people are born smoking we holders have nothing to worry about.

Dod

[Bouleversee]

Ian Pickering wrote:

"On a lighter (pun) note, it's my birthday!! 56 years old today"

A mere child! I thought you were about to retire. I also thought you were a shandy drinker - is there no beer in that?

Whatever your tipple, hope you have an enjoyable birthday. I'll raise a glass of something stronger to you this evening. Many happy returns.

Lorna

[idpickering]

When our youngest was born, he gave up - he was 71.

As long as people are born smoking we holders have nothing to worry about.

Dod

And the fact that the Chinese can have more babies helps too.