Imperial Brands (IMB) has announced in a trading update “first-half adjusted group operating profit ahead of last year on constant currency basis” and full-year outlook in line with guidance.
For a non-smoker it is a bit of a surprise that I am such a fanboy of Imperial Brands (IMB) shares. So what about today’s pre-close trading update?
I was a bit busy on Friday and missed two things. The first was that Rolls-Royce (RR.) shares pushed up nicely, which is good news given I am a fan of the stock (as last noted here, in February). I was pleased to read that “the owner of Air India is looking to snap up around 30 Airbus aircraft, which are powered by engines built by the UK’s leading engineering group". That was nice, but the real reason for the rise in shares was a few bid rumours based on the fact that, as the Mail on Sunday puts it, “arch-rival BAE Systems (BA.) could be a contender". All good fun…but don’t ever bet on bids alone. Meanwhile, I want to talk about Imperial Brands (IMB)...
Imperial Brands (IMB) has announced an update on its actions and impact of Russia’s invasion of Ukraine, concluding on Russia “an orderly transfer of our business as a going concern would be in the best interests… have begun negotiations with a local third party about a transfer”.
Imperial Brands (IMB) has announced results for its year ended 30th September 2021, emphasising “operational improvements supporting growth in net revenue, profit and free cash flow”.
There are naturally many different views on tobacco shares. I have never smoked and dislike even being moderately close to smokers, but Imperial Brands (IMB) is in the top half of my personal pension fund portfolio. And, as I noted back in July, it is not the only UK listed name in the global sector which is cheap. I have hardly made a fortune holding shares in Imperial Brands over the last couple of years, but I have done alright, aided by increasing my position earlier this year (and then there have been some very reasonable dividend payments too – more on this later). So what do I make of today’s full year numbers to the end of September?
Imperial Brands (IMB) is “pleased to report the business continues to perform well… on track to deliver our full-year results in line with expectations”. That suggests upside potential from a below 1500p share price.
Regular readers will know by now my views on tobacco giant Imperial Brands (IMB). Earlier this year I outlined HERE why a business with ‘brands such as JPS, West, Winstone and Davidoff plus new brands such as blu offer skills in ‘Next Generation Products’ (NGPs)’ offered turnaround value. Since then the shares have risen back to over sixteen quid, but how do I feel about the prospects for further share price appreciation and the maintenance of the current c. 8.5% dividend yield?
I know that my view on the tobacco sector is not shared by everyone but that is why - despite never being a tobacco smoker - I have held (and made money investing in) shares in the sector. As I noted about my position in Imperial Brand (IMB) back in late March HERE, ‘the story here remains attractive’ – observing the modest rating and high dividend yield as well as ‘the remaining major tobacco sector names also getting involved with cannabis’. However Imperial Brands and British American Tobacco (BATS) shares are both down over five percent today, losing some of their recent gains. What is going on?
Back in November both myself here plus Tom and Steve here concluded that the fourteen quid and change share prices back then meant Imperial Brands (IMB) was an overt buy. The shares have been up since the November ideas push but slipped yesterday. So what should we be thinking about a name with historic brands such as JPS, West, Winstone and Davidoff plus new brands such as blu offer skills in ‘Next Generation Products’ (NGPs) areas?
Imperial Brands (IMB) has announced results for its year ended 30th September 2020 and that, despite showing resilience, “we expect to deliver a stronger financial performance in 2021”...
We recommended shares in tobacco and ‘next generation’ products smoking company Imperial Brands (IMB) amidst the market instability in early April – noting trading performance resilience although we regarded a dividend cut as almost inevitable. The company has now announced results for its half-year ended 31st March 2020 – and there’s subsequently been a new addition to the shareholder list...
As everyone except a few delusional souls such as Bernie Madoff in his pomp have noted, this investment game is not easy. Today's ongoing lesson for me is Imperial Brands (IMB), where, if you had asked me yesterday – the day before its first half results, I would have predicted a playbook something akin to (1) the company says life is not easy but sort of workable akin to its revised guidance of a month or two ago (check), (2) it would cut the dividend citing the need to reduce debt but the absolute yield would still be attractive (check) and; (3) the shares would go up as panicky investor types would get the other side of their fears and realise there is an interesting and out-of-favour defensive total return story (hmm)...
Shares in tobacco and ‘next generation’ products smoking-focused Imperial Brands (IMB) were above 2000p early this year and it updated investors the other day on a number of matters including “although the economic and social impact of COVID-19 is developing rapidly, there has been no material impact on group performance to date and current trading remains in-line with expectations”. The shares are though now available to buy at 1665p - they were 1570.5p when this article first appeared - and we think you should although we regard a dividend cut as almost inevitable.
The gist of my article a few days ago on dividend behemoths Imperial Brands (IMB) and Royal Dutch Shell (RDSB) was that if either name cut their dividend by half and the shares rose, this would be super bullish. I know that dividend cuts are naturally disliked by income-seeking investors but in a world where I see respected analysts are calculating that '35% of companies in the FTSE All-Share index have cut their dividend in the past 30 days...that’s an even faster pace than when Lehman Brothers collapsed in 2008', you have to get with the backdrop.
