IMBBY Imperial Brands PLC (QX)

By Jaime Llinares Taboada

Imperial Brands PLC on Wednesday unveiled a new strategy to improve profits and progressively increase the dividend until 2025 by cutting costs and focusing on its core businesses.

The FTSE 100 tobacco company is proposing to reorganize and simplify the business by focusing its top markets and brands. The group is aiming to generate annualized savings of 100 million-150 million pounds ($137.3 million-$206.0 million) by the end of fiscal 2023, which would be partly used to increase investments in core capabilities such as sales and marketing by GBP50 million-GBP60 million.

As a result, Imperial Brands expects to grow its revenues by 1%-2% between fiscal 2020 and fiscal 2025, and to increase the adjusted operating profit at a mid-single-digit organic annual rate from fiscal 2023 until fiscal 2025.

In addition, the company promised to annually increase the dividend from the current rebased level--taking into account underlying business performance--and said it will consider surplus capital returns to shareholders once the leverage target of 2.0-2.5 times net-debt-to-Ebitda ratio is achieved.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

(END) Dow Jones Newswires

January 27, 2021 08:44 ET (13:44 GMT)

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