Tobacco giant Imperial Brands said it was “disappointed” with its half-year results after reporting a fall in profits in 2020.
The company behind Marlboro cigarettes, which is headquartered in Bristol, saw net revenue fall 0.9 per cent to £3.6billion, excluding the impact of exchange rates, and adjusted operating profit fall 7.7 per cent to £1.5billion.
Meanwhile, next generation product (NGP) revenue fell 43.2 per cent to £83million.
The company warned the impact of the coronavirus outbreak was expected to be more pronounced in the second half of the year due to pressure on duty free and travel.
Imperial also said it would rebase its dividend by a third as it looks to save cash during the pandemic.
“While we delivered against our revised expectations, we are disappointed with these results, and we remain fully focused on all opportunities to strengthen performance,” said joint chief executives Dominic Brisby and Joerg Biebernick.
“We would like to thank our employees for their hard work and commitment in these challenging times. Their support has been outstanding and we continue to prioritise their health, safety and well-being.”
The company said it had achieved “gains” in most of its priority markets but had reduced its NGP spend following poor returns on investment last year.
It also said “weaknesses” in the vapour category had resulted in lower revenue.
“Overall, Covid-19 has so far had only a small impact on trading but we expect this to be more pronounced in the second half due to continued pressures on our duty free and travel retail business, changes in consumption patterns including downtrading and a reversal of some first half inventory build,” Mr Brisby and Mr Biebernick added.
The news comes as the UK prepares to ban menthol cigarettes tomorrow (Wednesday, May 20).
The ban will stop the production and sale of any filters, paper, packaging, capsules or other component containing flavouring in cigarettes and hand-rolling tobacco.
According to the NHS, while menthol itself isn’t addictive, it can increase the addictiveness of nicotine.
It said: “Menthol is an additive that increases the addictiveness of the nicotine, though menthol by itself is not addictive in nature.
“Menthol is a mild anaesthetic that numbs your throat and stimulates cold receptors that creates a cooling sensation.”
