Imperial Tobacco sets buyback as troubles fade
LONDON (Reuters) - Imperial Tobacco (IMT.L), the world's No. 4 cigarette group set a 500 million pound share buyback and said it saw a return to sales growth as the West and Gauloises cigarette maker put its 2011 problems behind it.
The British company, which sells over 340 billion cigarettes annually, reported that half-year earnings beat forecasts as it gained from the ending of a price war in Spain and the unwinding of destocking in the United States and Ukraine.
"We'll continue to maximise the many growth opportunities that our unique portfolio offers to create further value for our shareholders," said Chief Executive Alison Cooper in a half-year results statement on Tuesday.
The Bristol-based group, which also makes Lambert & Butler, Davidoff and Fortuna cigarettes, reported adjusted earnings rose 5.3 percent to 93.1 pence a share for the half year to end-March, beating a forecast of 92.7 pence from Reuters estimates.
The half-year dividend increased 12.8 percent to 31.7 pence a share.
It saw a return to sales growth in the first three months of 2012 with revenues ahead 8 percent, putting its half year to end-March sales rise at 3.3 percent after Spain, the U.S., Ukraine and United Nations sanctions on Syria hit revenues in the last three months of 2011.
The 500 million pounds buyback follows a similar-sized scheme last year when it promised dividends would grow faster than earnings to push its payout ratio to shareholders to over 50 percent after it paid down debts following its 2008 Altadis acquisition.
Imperial like its bigger rivals Philip Morris (PM.N), British American Tobacco (BATS.L) and Japan Tobacco (2914.T) has suffered from declining smoking in mature markets but has offset this by hiking prices and expanding into emerging markets.
Imperial, like these competitors, is seeing its cigarette sales and volumes slowly come back which has helped its shares recover to close on Monday at 2,464 pence, up nearly 20 percent from a year ago.
(Reporting by David Jones; Editing by Helen Massy-Beresford)
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