The shares of Imperial Brands have set a fresh multi-year high after the tobacco and vaping products firm posted annual results today.
Tobacco volumes for the year declined 4%, but revenues from next generation products such as vapes and heated tobacco rose by 26.4%.
The share price improvement by income stock Imperial came in a disappointing session for the FTSE 100 index.
FTSE 100 Live Tuesday
Imperial Brands results lift shares
Mulberry half-year loss widens
Australia stock market sets record
Market update: FTSE 100 lower, Vesuvius and Bodycote rebound in FTSE 250
10:21 , Graeme Evans
The strong run for FTSE 100 stalwart Imperial Brands continued today as annual results helped the firm’s shares to a fresh five-year high.
Tobacco volumes for the year declined 4%, but revenues from next generation products such as vapes and heated tobacco rose by 26.4%.
Operating profit lifted 4.6% to ￡8.2 billion with strong levels of cash conversion leaving Imperial well placed to bolster shareholder returns over the next year.
The shares are now up by a third in 2024, including today’s 2% or 44p improvement to 2445p.
Richard Hunter, head of markets at Interactive Investor, said: “Changing lifestyle habits and tougher regulation perennially overhang this sector, but in the meantime Imperial Brands continues to play the cards it has been dealt with aplomb.”
Imperial was joined near the top of the FTSE 100 by BT Group, which rallied 2.6p to 147.35p after yesterday’s disclosure that Bharti Communications has completed its acquisition of the 24.5% stake previously held by Altice UK.
Other stronger stocks included BAE Systems and AstraZeneca but the FTSE 100 index gave up initial gains to stand 35.75 points lower at 8073.57.
Diploma, which is focused on the sectors of seals, controls and life sciences, gave up some of this year’s share price momentum in the wake of annual results.
It continued its record of compounding growth by posting a 6% rise in organic revenues and 20% improvement in operating profit to ￡285 million. The total dividend is 5% higher.
Despite facing a tougher environment, chief executive Johnny Thomson said he felt “positive about the year ahead, and our long term prospects”.
Shares fell 6% or 290p to 4246p, reducing this year’s gains to 23%.
Business events and academic publisher Informa also retreated 22.2p to 833p, even though it reported continuing momentum heading into 2025.
Figures for the first ten months of 2024 showed underlying revenues growth of 10.7% alongside margin expansion and an acceleration in free cash flow.
The FTSE 250 index weakened 0.5% or 95.64 points to 20,299.77.
Vesuvius led the risers board after the molten metal flow engineering firm said it had performed robustly in the four months to 31 October, aided by market share gains, resilient pricing and further cost reductions.
It expects its steel and foundry markets to remain subdued for the remainder of the financial year and said it is cautious on the timing of a recovery.
Vesuvius shares lifted 7% or 26.5p to 396p but are still 17% lower this year.
Heat treatment firm Bodycote also fared well in the FTSE 250, lifting 6% or 32p to 607p after posting a similar message to investors showing a resilient performance in challenging end markets.
Former FTSE 250 stock Avon Technologies lifted to near its highest level since October 2021 after reporting strong annual results.
The provider of respiratory and head protection systems for militaries and first responders rose 9% or 118p to 1428p after annual earnings beat City forecasts. It also said it expected to meet medium-term targets in 2026 rather than 2027.
Digital identity technology firm GB Group extended its strong run on AIM, adding another 3% or 10.6p to 352p after reporting continued margin improvement in half-year results.
BT and Imperial lead FTSE 100, Diploma shares down 4%
08:40 , Graeme Evans
The FTSE 100 index has risen 24.69 points to 8134.01, led by Imperial Brands after the tobacco group’s results sent shares up 58p to 2459p.
Other strong performers include BT Group, which lifted 3.1p to 147.8p.
Seals and controls business Diploma fell 4% or 174p to 4362p, despite growing its dividend by another 5% alongside a 20% rise in annual operating profit.
Informa, the business events host and academic publisher, fell by 15.2p to 840p after reiterating full-year guidance in the wake of double-digit underlying revenue growth in the first ten months of 2024.
Among other companies reporting today, defence products company Avon Technologies lifted 5% or 60.9p to 1370.9p and digital identity technology firm GB Group rose by 7% or 23.5p to 364.9p.
Imperial Brands results lift shares 3%
08:13 , Graeme Evans
The shares of Imperial Brands are 3% or 83p higher at 2484p after the tobacco and vaping products business posted annual results this morning.
Tobacco volumes declined 4% but this was offset by strong pricing and growth in Next Generation Products (NGP) such as vapes and heated tobacco
Hargreaves Lansdown head of equity research Derren Nathan said: “Imperial is by no means the leader in this space, but it is a challenger and at 8% of the total pie, it’s starting to become more meaningful. But for now, it’s still a loss-making activity.”
He added that cash conversion of 100% allowed Imperial to continue NGP investment as well as impressive distributions to shareholders.
Imperial plans to return over 13% of its market value to shareholders over the current financial year.
Nathan added: “There’s cautious optimism for the year ahead too, with tobacco and NGP revenue expected to grow at a slow burn in the low-single digits and operating profits to land a little further ahead in the mid-single digit range.”
Australia's ASX 200 closes at record, China stocks recover
08:02 , Graeme Evans
Australia’s stock market index today closed at a fresh record after surging 0.9% on the back of stronger energy and gold mining stocks.
The rally for the ASX 200 to 8374 followed the minutes of this month’s decision to keep interest rates at 4.35% for the eighth meeting in a row.
Japan's Nikkei 225 also advanced 0.5% while the Shanghai Composite and Hang Seng index recovered from earlier weakness to reach positive territory.
Mulberry loss widens, new CEO focused on turnaround
07:38 , Graeme Evans
Mulberry losses for the six months to 28 September have widened to ￡15.7 million from ￡12.8 million, after revenues fell 19% to ￡56.1 million.
Andrea Baldo, who has been chief executive for three months, said the first half results showed “the clear need to reprioritise and rebuild the business”.
He said Mulberry has taken “decisive steps” to streamline operations, improve margins, reduce working capital and strengthen the cash position.
Baldo said the industry is facing a period of significant uncertainty, with the UK market particularly impacted by the challenging conditions.
A strategic review of the business is due to be completed within the next month. Baldo said: “I am confident we are making the right moves to bring Mulberry back to profitability."
Imperial tobacco volumes down 4%, operating profits higher
07:24 , Graeme Evans
Imperial Brands, whose brands include Davidoff and Blu, today reported 4.6% growth in adjusted operating profit on a constant currency basis to ￡8.2 billion.
Tobacco volumes for the year to 30 September declined 4%, while net revenues from next generation products (NGP) rose by 26.4% to ￡335 million.
Imperial previously announced a 4.5% rise in annual dividend to 153.42p a share.
For the new financial year, the Bristol-based company expects to deliver tobacco and next generation net revenue growth at low single-digit constant currency.
It also sees adjusted operating profit close to the middle of its mid-single-digit range at constant currency.
The FTSE 100-listed company said: “This will be driven by continued profit growth from our combustible tobacco business and a further reduction in operating losses in our NGP portfolio.
“Given the strong momentum in our NGP business, we will continue to invest to drive another year of double-digit constant currency net revenue growth, while balancing our objective to build a sustainable and profitable business.”
FTSE 100 set to build on Monday's progress, Tesla shares up 6%
06:59 , Graeme Evans
The FTSE 100 index is forecast to open 28 points higher at 8138, having risen by 46 points in Monday’s session.
The improvement follows a positive performance on Wall Street after the S&P 500 index rose 0.4% and the Nasdaq Composite by 0.6%.
Big risers included Tesla, with the car maker’s shares up 6% by the closing bell.
The Dow Jones Industrial Average finished slightly lower.
The pound stands at $1.267, while Brent Crude is at $73.38 a barrel and gold at $2626 an ounce.
