Imperial Tobacco expects a 2% rise in sales despite demand falling in Western economies

 

“There were no surprises in this update from the cigarette, cigar and tobacco manufacturer. Spain’s struggling market continues to hinder Imperial Tobacco’s progress throughout the rest of the EU, with the region’s operating profits for the year expected to fall by £70m – albeit a slight improvement from the previously expected figure of £110m.  

 

“Imperial Tobacco continues to focus on building its position in the emerging markets, especially Eastern Europe, Africa, the Middle East and Asia. The demand in these regions has driven sales for the company, which are expected to rise by 2% for the year. This has helped offset the poorer performance in the developed markets where consumers face a tough economic climate. Sales in Western Europe and the US are seeing a decline or flat rate so development in emerging markets is essential for the company.     

 

“We continue to recommend investors ‘sell’ Imperial Tobacco. However, a re-rating could be on the cards following results in November, should we start seeing a turnaround for the company. British American Tobacco remains our preferred play within the sector offering investors better growth potential on a global scale.”

 

 

 

 

 

THIS DATA IS PROVIDED BY NICK RAYNOR, INVESTMENT ADVISER AT THE SHARE CENTRE. THIS IS NOT INTENDED TO CONSTITUTE AN OFFER OR AGREEMENT TO BUY OR SELL INVESTMENTS.

 

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