Imperial Brands Trading Statement

[idpickering]

On track to meet full year expectations



· Increased investment delivering improved share performance in most priority markets

· Focus on quality growth with continued share gains from Growth Brands

· Stronger second half with volumes outperforming the industry

Full item here;

https://www.investegate.co.uk/imperial- ... 00010647S/

[kempiejon]

and IMB deliver cash to me tomorrow, having just checked http://www.dividenddata.co.uk/dividend- ... y?epic=IMB I see 10 years of 10%pa dividend growth.

[Dod1010]

Thanks Ian. If we can read through the jargon, things seem to be going pretty well and something to cheer up all we holders. As kempiejohn says the interim is tomorrow and in fact its stablemate BAT delivers today.

I am not a smoker but any HYPer is paying dearly for his principals if he does not hold them both.

Dod

[idpickering]

Thanks Ian. If we can read through the jargon, things seem to be going pretty well and something to cheer up all we holders. As kempiejohn says the interim is tomorrow and in fact its stablemate BAT delivers today.

I am not a smoker but any HYPer is paying dearly for his principals if he does not hold them both.

Dod

You're welcome, and thanks for your input kempijon and yourself Dod. IMB and BAT are both mainstays in my HYP and are currently weighing in at 8.6% in capital value terms of my 28 share HYP. I did top up IMB recently to take advantage of the current downward trend, and I have no intention of selling either holding any time soon, if ever as Mr Buffet favours apparently. IMB are down 2% currently, but I don't get why anyone, let alone a HYPer, would sell out on this dividend machine that is Imperial Brands.

Ian.

[idpickering]

PS - I don't smoke either, and I don't mind others doing so....

[OLTB]

I also hold and recently topped up so pleased with the positive outlook - a 2% fall in share price means a further top-up may be likely! Perhaps the comment on the situation regarding tobacco supplier Palmer and Harvey is worrying Mr Market as IMB seem to have quite a few million invested with them and they're trying to develop a rescue plan (along with Japan Tobacco International I think).

Cheers, OLTB.

[kempiejon]

I also hold and recently topped up so pleased with the positive outlook - a 2% fall in share price means a further top-up may be likely! Perhaps the comment on the situation regarding tobacco supplier Palmer and Harvey is worrying Mr Market as IMB seem to have quite a few million invested with them and they're trying to develop a rescue plan (along with Japan Tobacco International I think).

Cheers, OLTB.

Some details on P&H here, http://www.bbc.co.uk/news/business-41425678 not a news story I'd noticed.

[richfool]

Tobacco stocks may have been a long term darling of HYP'ers, but ultimately I cannot see a long term future for tobacco or thus tobacco stocks. (IMHO) Eventually the effects health education worldwide and other actions by governments will win through and markets & customer demand will dry up. I obviously don't know how long that will take and there maybe some more mileage in them yet, but to me the slippery slope has started and thus I won't touch tobacco stocks, no matter how much they may appear to fit the principles of HYP'ers. (To me they are doomed!)

IF anyone is interested, I have posted some thoughts about the subject on the IT board:

viewtopic.php?f=54&t=6552&start=20

[BreakoutBoy]

Well IMB is my single biggest exposure currently: it is increasing its dividend, it has a fantastic product that people would rather die than go without. And it sells globally. In hard times a fag is seen by many to be a small treat, a currency even, and goodness knows there are enough people going through hard times around the world right now, dragging on a well earned ciggie right now. I bet a lot of them are IMB customers.

At 4% down today, and payday tomorrow, I will likely top-up.

[Breelander]

...product that people would rather die than go without...

Increasingly, ex-customers are turning to vaping - now with official 'Stoptober' blessing.

...the government campaign during October will feature vaping in its TV adverts for the first time.

http://www.bbc.co.uk/news/health-41339790

[BreakoutBoy]

Ever tried quitting? I see a lot of vaping, but I also still see a lot of smoking, and smoking related disease. Nicotine is one of the most addictive substances ever discovered, an exceptionally addictive drug, and its users find it easy to start but hard to give up consistently.

Pretty confident that cigarettes will be still bought and sold long after I am gone, if only to cater for all the vapers that fall off the wagon.

[Breelander]

Ever tried quitting?

Yes. Six years and counting...

(Bree the vaper)

[Arborbridge]

It's difficult to see how such a dividend growth can be maintained for so long: but let's just enjoy it while we can:)

Addicted to dividend growth, not nicotine.


Arb.

[Bouleversee]

"On the corporate front, shares in Imperial Brands were in the red as the cigarette manufacturer confirmed it was in talks to help rescue UK tobacco supplier Palmer & Harvey, and said it expected to deliver strong growth in full year revenues and earnings at actual currency rates"

The above was from ADVFN's Evening Markets Bulletin.

I wonder why P & H need rescuing if smoking is still so prevalent.

[baldchap]

Tobacco stocks may have been a long term darling of HYP'ers, but ultimately I cannot see a long term future for tobacco or thus tobacco stocks

There are more smokers now globally than in the 1980's. I doubt it will go down in my lifetime with the current world population growth. Don't make the mistake of viewing the World through Western eyes.

In a declining or stagnant industry, which I don't think it is quite yet, (with the possible exception of USA bound Altria), companies can still make a handsome profit as the industry survivors are efficient money making machines.
IMB (a relative minnow), BATS, PM, and JTI have pretty much got the market sewn up.

[OLTB]

I wonder why P & H need rescuing if smoking is still so prevalent.

Hi Bouleversee

I think the link here http://www.bbc.co.uk/news/business-41425678 explains that Palmer and Harvey (as well as being Britain's main cigarette supplier) delivers 12,000 products to 90,000 outlets on very thin margins and profit is difficult.

Hmmm, wafer thin margins...difficult to make profit...Carillion anyone?

Cheers, OLTB.

[richfool]

Not that I place a great deal of credence to MF articles, but the MF article below sums up some key points. I too have seen restrictions/bans on smoking in bars, restaurants & public places etc in some Asian countries, along with increasing educational programmes about the harmful effects of smoking. My bolding in the extract quoted below:

http://www.fool.co.uk/investing/2017/09 ... oid-today/

I was once a big fan of the likes of Imperial Brands (LSE: IMB) thanks to the formidable brand power of cartons like John Player Special and West, and the FTSE 100 firm’s drive to shut down scores of underperforming labels in favour of prioritising these terrific revenues-driving brands. I myself used to own shares in the London business up until fairly recently.

But the rising headwinds in developing and emerging economies alike, from public smoking bans to the introduction of plain packaging, has caused me to revise my previously-bullish perspective. Indeed, the US Food and Drug Administration’s plans to possibly cut the levels of nicotine in cigarettes to non-addictive levels, which was declared in August, was the final straw for me.

[Raptor]

"On the corporate front, shares in Imperial Brands were in the red as the cigarette manufacturer confirmed it was in talks to help rescue UK tobacco supplier Palmer & Harvey, and said it expected to deliver strong growth in full year revenues and earnings at actual currency rates"

The above was from ADVFN's Evening Markets Bulletin.

I wonder why P & H need rescuing if smoking is still so prevalent.

They don't just do tobacco. They are also a big supplier of Tesco for frozen. The product range sems to have shrunk since the new rules came in and I believe that vaping is growing.

Raptor

[Dod1010]

richfool is promoting his concerns about tobacco shares on the back of his ethical objections as far as I can see. The ethical objections are fine and very personal but as for tobacco shares being a dying industry so to speak that is stretching things a bit. We can find shortcomings in most industries.

I expect he will hold some utility shares. There is now a real political risk with them. Does he advise selling them as well?

Meanwhile Imperial Brands are churning out dividends, increasing at 10% per year. If you can overcome the ethical issues, they, like BAT, are close to the perfect HYP share.

If someone said 'I know of an industry with a ready market, no advertising costs and not much capex. Profits are mostly in cash', what would any HYP investor do? Load up on them of course.

Dod

[dspp]

I hold Imperial and BATS, so have no moral stance on this sector. However it is sensible to bear in mind the facts regarding the global long term trends in the tobacco area. I did some very brief checks on this a while back and have previously posted my observations (viewtopic.php?f=7&t=567&p=15972&hilit=peak+tobacco#p15938) , which I will repost here in the hope that someone has better quality global-scale facts to offer. Not local scale, nor anecdote, but facts.

The result is that we could be at 'peak tobacco' both in production & consumption terms (as after all they must balance). Take a look at these links

https://www.statista.com/statistics/279 ... ince-1880/ (stick consumption 1880-2014)
http://www.tobaccoreporter.com/2016/05/balancing-act-3/ (tobacco production 2012-2016)
http://www.tobaccoleaf.org/Userfiles/Fi ... GA-eng.pdf (interesting spin)

If I am reading this correctly peak tobacco was 2009 and the trend is down now despite global population continuing to increase. This has the same implications for tobacco as I pose for oil in my watching out for effects of peak oil, and likely over similar decadal timescales. However I am seeing much less discussion about tobacco (global revenues $500bn) vs oil (global revenues $760bn - 1.2trn). It seems to me that the larger brands/companies are pursuing declining market strategies which implies they recognise this. Food for thought in my mind.

If this is correct there will be a optimal moment to exit tobacco stocks. I do not know when that is, but I am paying attention. It is both a matter of capital growth/risk and of dividend (though any purist HYPers will only be looking at half of the available information). I would be very happy to listen to anyone with better facts than I have been able to unearth.

regards, dspp