Imperial Tobacco On Track for Future Profit

Imperial Tobacco's broad range of products, which is being extended to include next generation products, particularly in vaping, gives the firm economies of scope and scale

Philip Gorham 10 January, 2018 | 7:58AM

Tobacco stocks divide investors

Imperial Brands' (IMB) market repeatable model has been the guiding hand behind its recent strategy, and Morningstar equity analysts think the firm has executed well. Imperial's stated aim is quality market share growth through six pillars, which it describes as: simple market-focused portfolio, sustainable brand investments, always on pricing strategy, core range everywhere all the time, tailor custom solutions, and honest accurate learning.

In portfolio optimisation, the company has made great strides, reducing its total brand count by 32% by the end of fiscal 2017, and targets a total reduction of 50% by 2020. Execution on the brand migration program has been impressive, with a consumer retention rate of around 95%. The streamlined portfolio should allow for more focused brand investments, and sustainable cost reductions.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Imperial Brands PLC1,500.81 GBX0.22

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Philip Gorham  

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