Today, the tobacco group Imperial Brands has hiked its shareholder returns for the year as net debt has continued to decline.
In a pre-close period trading update, the company said it was trading “in line with expectations” for the year, with growth at both its tobacco and next generation product (NGP) lines.
The company added that it had seen “strong growth” in NGP net revenue with a “further reduction in operating losses.”
NGP revenue is expected to grow 20 per cent to 30 per cent at constant currency rates.
Imperial Brands added that earnings per share growth is “accelerating” driven by “adjusted operating profit growth and share count reduction from the ongoing buyback.”
The group also announced an update to its debt and capital return plans.
It said cash conversion “remains strong”, and leverage at the end of the year is expected to fall at the lower end of the company’s targeted range of 2-2.5 times earnings before interest, tax, depreciation and amortisation (EBITDA).
Imperial Brands also said it would increase cash returns to investors from £2.4bn to £2.8bn for the year.
The company said the cash returns would comprise a £1.25bn share buyback, up 13.6 per cent from the previous commitment and a cash dividend of £1.5bn.
Imperial Brands also announced a change to its dividend policy.
Going forward the company said that it would pay a quarterly dividend, which will “temporarily accelerate dividend cash payments of approximately £270m.”
The company said this “smoothing of the dividend payment profile will result in more consistent cash returns to shareholders throughout the year.”