Imperial Brands to show cigarette demand holding up against anti-smoking plans

Winston and JPS cigarette are expected to say revenues from its tobacco and so-called next generation products hit £8bn in the year to September

Investors in tobacco giant Imperial Brands will be hoping to see the group report an uptick in earnings, as demand for cigarettes holds up against a growing number of anti-smoking measures in the UK.

The FTSE 100-listed company reports its full-year financial results on Tuesday. Analysts are expecting the Winston and JPS cigarette maker to say revenues from its tobacco and so-called next generation products (NGPs) hit £8bn in the year to September, nearly 3% higher than the previous year.

It is also expected to report a group adjusted operating profit of £3.9bn , about 4% higher than last year at constant currency, according to the latest consensus. Vapes, heated tobacco and oral nicotine pouches all come under the umbrella of NGPs, because they are manufactured to separate nicotine from harmful tobacco smoke.

Imperial Brands has seen NGP sales grow rapidly as it rolls out new products, but it still makes the bulk of its sales from traditional cigarettes. It has benefited from rising prices amid a broader decline in the number of people smoking cigarettes, particularly in some of its largest western markets.

A group of analysts for AJ Bell said: “Shares in Imperial Brands, the tobacco giant behind JPS, Davidoff, Winston and Gauloises, trade at a five-year high, despite higher duties on cigarettes and vapes in the latest UK Budget.

“These moves add to a long list of regulatory and tax measures designed to deter consumers from smoking, after interventions on advertising and packaging design, and there could be more to come if the new Labour Government’s proposed ban on smoking at some outdoor venues is enforced.”

They added that Imperial Brands nonetheless “remains very profitable” which is partly because of chief executive Stefan Bomhard’s five-year plan, outlined in 2020. Smokers and vapers in the UK will pay more after Chancellor Rachel Reeves announced a new vaping tax and an increase in tobacco duty to “maintain the incentive to give up smoking”.

The flat rate duty on all vaping liquid will come into effect from October 2026. Meanwhile, the Tobacco and Vapes Bill has been introduced in Parliament, which would prevent anyone born after January 1 2009 from legally smoking by gradually raising the age at which tobacco can be bought.

However, the Government has reversed potential plans to make it illegal to smoke in pub beer gardens.