London, May 13, 2026, 17:01 BST
- Imperial Brands kept its full-year outlook after first-half adjusted operating profit rose 0.6%, excluding currency moves.
- The cigarette maker lifted its interim dividend by 4% and pressed on with a £1.45 billion buyback.
- Management warned a prolonged Middle East conflict could hit costs and demand, though it has seen no material impact so far.
Imperial Brands PLC held its 2026 outlook and raised its interim dividend, leaning on tobacco price rises and cash returns even as it warned that the Iran conflict could push up costs if it drags on. The Bristol-based maker of Winston, Davidoff and Gauloises said adjusted operating profit, which strips out some one-off items, rose 0.6% at constant currency to £1.64 billion in the six months to March 31.
The update matters because investors are testing whether Imperial can keep squeezing more profit from a shrinking cigarette market while building scale in next-generation products, or NGPs — vapes, heated tobacco and oral nicotine. Its shares have been under pressure since an April warning over market-share losses, and Tuesday’s results showed the company still needs a stronger second half to meet its 3%-5% full-year adjusted operating-profit growth target.
Reported revenue rose 0.8% to £14.72 billion. Tobacco and NGP net revenue rose 1.8%, with tobacco net revenue up 1.5% as pricing more than offset lower volumes. NGP net revenue rose 7.5%, helped by Europe and the AAACE region, which covers Africa, Asia, Australasia and Central and Eastern Europe.
Chief Executive Lukas Paravicini called it a “positive start” to the company’s 2030 plan. He said robust pricing in combustibles had supported low-single-digit growth, while Imperial’s NGP business gained share across all three categories. Imperial Brands Corporate Site
There was a blemish. Imperial’s aggregate market share across its five priority markets — the United States, Germany, Britain, Spain and Australia — fell 16 basis points, or 0.16 percentage point, as the company chose profit over volume. Reuters reported that RBC analysts viewed the decline as a concern after Imperial had built share gains between 2020 and 2025.
The company said tobacco volumes fell 1.5% to 85.7 billion stick equivalents, a measure that combines cigarettes, fine-cut tobacco, cigars and snus. It also said reported operating profit fell 36.5% to £925 million, reflecting charges tied to a Delaware settlement and costs linked to the 2030 strategy.
Cash remains the offset. Imperial completed £809 million of buybacks in the period, kept a £1.45 billion buyback programme under way for the year and raised its interim dividend to 83.36 pence a share. Adjusted earnings per share rose 5.3% to 127.7 pence, helped by the lower share count.
The risk paragraph is now the Middle East. Imperial said the conflict had made the macro backdrop more uncertain but had not caused a material impact to date. Paravicini told reporters any hit could show up in the 2027 financial year through input costs such as filters and plastics, as well as consumer demand.
Prediction markets also point to a long tail of uncertainty around the region. Kalshi’s market on Strait of Hormuz traffic returning to normal showed odds of 37% before Aug. 1 and 48% before Sept. 1, while Polymarket’s U.S.-Iran permanent peace market put the chance of a deal by June 30 at 34% and by Dec. 31 at 63%.
Imperial is also reshaping its U.S. nicotine strategy. The company said losses in NGP widened by £3 million on an adjusted basis, partly because of weaker U.S. NGP revenue, while reported losses were helped by the decision to transition its legacy myblu vaping business out of the U.S. market.
That leaves Zone, its oral nicotine brand, as the main U.S. push in a market where British American Tobacco’s Velo, Philip Morris International’s Zyn and Altria’s On! are fighting for share. Reuters noted in February that BAT had reported market-share gains for Velo against Zyn and On!, underscoring how crowded the category has become.
Morningstar analyst Kristoffer Inton wrote on Wednesday that Imperial’s stock looked moderately undervalued, but said tobacco remained far more important to the company’s valuation than NGPs, which he said were still just 5% of revenue excluding distribution. He added that the company’s focus on cash flow and buybacks came with a trade-off: long-term revenue growth below many peers.
Derren Nathan, head of equity research at Hargreaves Lansdown, was more cautious on the cadence of the year. He wrote that performance “needs to improve” in the second half, adding that NGPs remain a small part of the business and have yet to turn a profit. Hargreaves Lansdown
Imperial shares closed Tuesday up 3.8% at £28.32, outperforming a slightly lower FTSE 100, according to MarketWatch data. That bounce did not remove the wider question around the stock: how long pricing, buybacks and dividends can offset falling cigarette volumes while the newer nicotine portfolio is still proving itself.
