Imperial Brands Stock Gains as Company Increases Shareholder Returns

Tobacco and next-generation products (NGP) company Imperial Brands (LON: IMB) announced an increase in shareholder returns for the upcoming fiscal year in its FY24 pre-close trading update on Tuesday.

The company's stock price jumped more than 4% following the announcement, making it the top FTSE 100 mover in early Tuesday trading.

In its trading statement, Imperial Brands confirmed that trading is in line with expectations, with continued growth in both tobacco and NGP segments.

The company maintained a stable aggregate market share in its five priority markets while delivering strong pricing. Additionally, NGP net revenues have experienced “strong growth,” accompanied by a “further reduction” in operating losses.

Furthermore, Imperial Brands stated that its adjusted operating cash conversion “remains strong” and it expects “full-year leverage to remain at the lower end of our 2.0-2.5 range for adjusted net debt to EBITDA.”

For FY25, Imperial Brands has committed to returning approximately £2.8 billion to shareholders, a notable increase from the £2.4 billion commitment in FY24.

The includes a share buyback of £1.25 billion, representing a 13.6% increase, and cash dividends of approximately £1.5 billion. The buyback is expected to be completed no later than 29 October 2025.

The company is also transitioning to four equal quarterly dividend payments going forward.

Cash dividends payable in FY25 will amount to around £1.5 billion. Imperial Brands said its FY24 annual dividend rose by 4.5% to 153.43 pence per share.