London, May 13, 2026, 17:01 BST
- Imperial Brands left its full-year guidance unchanged, with first-half adjusted operating profit up 0.6% when stripping out currency effects.
- The cigarette maker bumped up its interim dividend 4% and kept its £1.45 billion buyback rolling.
- Management cautioned that if conflict in the Middle East drags on, costs and demand could take a hit. For now, though, they haven’t seen any significant effects.
Imperial Brands PLC left its 2026 guidance unchanged and bumped up the interim dividend, counting on higher tobacco prices and steady cash returns. The group—behind Winston, Davidoff, and Gauloises—flagged that an extended conflict involving Iran could increase costs. Adjusted operating profit, excluding one-offs, was up 0.6% at constant currency, coming in at £1.64 billion for the half-year to March 31.
The update is a key test for Imperial: Can it keep juicing profits from a shrinking cigarette market, while also scaling up next-generation products—think vapes, heated tobacco, oral nicotine? The stock has struggled since April’s warning about lost market share. Tuesday’s numbers made it clear: hitting that 3%-5% adjusted operating-profit growth for the year will require a much stronger showing in the second half.
Revenue ticked up 0.8% to £14.72 billion. Net revenue from tobacco and NGP increased 1.8%, with tobacco alone gaining 1.5%—price hikes made up for declining volumes. NGP net revenue advanced 7.5%, boosted by growth in Europe and the AAACE region, spanning Africa, Asia, Australasia, and Central and Eastern Europe.
“A positive start” to the 2030 plan, Chief Executive Lukas Paravicini said. Strong pricing in combustibles helped deliver low-single-digit growth, and Imperial’s NGP business picked up share in each of its three categories. Imperial Brands Corporate Site
But not everything went Imperial’s way. In its five key markets—the U.S., Germany, Britain, Spain, and Australia—the company’s combined market share slipped by 16 basis points, or 0.16 percentage point. The reason? Imperial prioritized margins over chasing bigger sales numbers. RBC analysts flagged the drop, telling Reuters it’s troubling after the company had managed to build share in these markets from 2020 through 2025.
The company reported a 1.5% drop in tobacco volumes, landing at 85.7 billion stick equivalents—a metric that rolls in cigarettes, fine-cut, cigars, and snus. Reported operating profit slid 36.5% to £925 million, weighed down by Delaware settlement charges and expenses from its 2030 strategy.
Cash is still balancing the equation. Imperial executed £809 million in buybacks during the period, continued to press ahead with its £1.45 billion buyback plan for the year, and bumped the interim dividend to 83.36 pence per share. Adjusted EPS climbed 5.3% to 127.7 pence, helped by fewer shares in circulation.
The Middle East has now become the key risk factor, according to Imperial. The company noted the conflict added uncertainty to the macro environment, but so far, there’s been no material impact. Chief executive Paravicini told reporters any potential fallout might emerge in the 2027 financial year, affecting input costs—including filters and plastics—or consumer demand.
Prediction market signals still suggest a messy outlook for the region. The odds on Kalshi’s Strait of Hormuz traffic market: 37% for a return to normal before Aug. 1, ticking up to 48% before Sept. 1. Over at Polymarket, traders gave a U.S.-Iran permanent peace deal by June 30 a 34% shot, bumping up to 63% for Dec. 31.
Imperial is shifting gears on nicotine in the U.S. The company reported that adjusted losses in NGP increased by £3 million, a hit driven in part by softer NGP revenue stateside. Reported losses, though, got a lift thanks to Imperial’s move to wind down its legacy myblu vaping operations in the U.S.
Now Zone—its oral nicotine label—stands as the core U.S. play, up against heavyweights: British American Tobacco’s Velo, Philip Morris International’s Zyn, and Altria’s On!, all vying for a piece of the action. Back in February, Reuters reported that BAT was picking up share for Velo at the expense of both Zyn and On!, a reminder of just how packed the field’s gotten.
Imperial’s shares appear moderately undervalued, Morningstar’s Kristoffer Inton said in a note Wednesday, though he pointed out that tobacco continues to make up the bulk of the company’s value. NGPs, he estimated, still account for just 5% of revenue, excluding distribution. Inton also flagged a trade-off in Imperial’s priorities: emphasizing cash flow and buybacks has meant the company’s long-term revenue growth lags many peers.
Derren Nathan, who heads up equity research at Hargreaves Lansdown, struck a more reserved tone on this year’s pace. He said performance “needs to improve” in the back half, noting NGPs are still a minor slice of the business and haven’t posted a profit yet. Hargreaves Lansdown
Imperial shares finished Tuesday at £28.32, up 3.8% and beating a FTSE 100 that slipped a bit, MarketWatch reports. The move higher doesn’t put to rest the broader concern: how much longer can pricing, buybacks, and dividends keep compensating for shrinking cigarette volumes, especially with the company’s newer nicotine products still in the early proving stage.
