Tobacco company Imperial Brands forecast better profits for 2021 on Tuesday, helped by expected improvements in its e-cigarette business, which declined dramatically in 2020.
The maker of Gauloises and West cigarettes forecast low to mid-single digit growth in organic adjusted operating profit for 2021, excluding the impact of the sale of its premium cigar business. That is broadly in line with expectations, according to Investec analyst Alicia Forry.
In 2020, the company's 'next-generation products' business fell by 27%, following a spate of vaping-related illnesses and deaths in the United States and a ban there on flavours of certain e-cigarettes.
'The Cleaning Of The House'
But Imperial, led by a new chief executive, expects 'the cleaning of the house' in this business to result in improved performance.
The company declined to give financial details on the business, pending an outcome of a strategic review that is underway, and expects to provide more information at a capital markets update scheduled for 27 January.
It reported full-year adjusted group revenue of £7.99 billion(€8.9 billion), up 0.8% for the full year which ended 30 September.
Adjusted earnings per share of 254.4 pence were down 5.6% due in part to writedowns related to its e-cigarette business and reduced profitability in its cigarette business as buyers turned to cheaper cigarettes.