By Timothy S. Donahue
Top Takeaways:
- Tobacco growth: Imperial expects its sixth consecutive year of tobacco net revenue growth, supported by pricing and market share gains.
- NGP momentum: NGP revenue is expected to grow by double digits, with market share gains across heated tobacco, vaping and nicotine pouches.
- Shareholder returns: The company announced a £1.5 billion (US$1.98) share buyback for fiscal 2027.
Imperial Brands is proving that selling less tobacco doesn’t mean earning less revenue.
On Thursday, the British tobacco company said it remains on track to meet its fiscal 2026 financial targets and announced a £1.5 billion ($1.98 billion) share buyback for fiscal 2027, continuing a capital return program that has reduced its issued share capital by more than 21% since October 2022.
In a pre-close trading update for the fiscal year ended Sept. 30, Imperial said tobacco net revenue is expected to increase by a low-single-digit percentage, marking its sixth consecutive year of growth. The performance reflects strong pricing and market-share gains in targeted segments in the United States and Germany, partially offset by low-single-digit declines in group-wide tobacco volumes.
“Our tobacco model continues to deliver sustainable growth in net revenue and adjusted operating profit,” the company said. “This translates into earnings per share growth and robust cashflow, underpinning strong returns for shareholders.”
Imperial also expects double-digit net revenue growth in next-generation products (NGPs) and market share gains across all three categories: heated tobacco, vaping, and modern oral nicotine.
The company highlighted growing momentum for its Pulze 3.0 heated tobacco device and new iD sticks, the continued performance of its blu vaping products, and the expansion of its oral nicotine portfolio.
“We continue to build scale in NGP and expect to grow share in all three categories, with double-digit net revenue growth,” Imperial said.
Its oral nicotine portfolio includes Zone and Skruf, along with the recently acquired Black Buffalo business in the United States and Helwit in Sweden.
Imperial expects adjusted operating profit growth of 3% to 5%, in line with its previous guidance. Adjusted earnings per share are projected to increase at a high-single-digit rate. Free cash flow is expected to exceed £2.2 billion for the year.
The company also reaffirmed its target to achieve at least £320 million in cost savings by 2030. Manufacturing initiatives completed in FY26 are expected to support a future £100 million reduction in overhead.
“We have strong momentum behind our transformation towards becoming a more consumer-centric, data-led, agile and efficient challenger,” Imperial said.
The company has been restructuring parts of its business to improve efficiency and expand its consumer-focused capabilities. In August, it announced workforce reductions that affected operations in the United States and Europe, including those of its U.S. subsidiary, ITG Brands.
The newly announced £1.5 billion buyback follows the completion of the £1.45 billion repurchase program launched in October 2025. Imperial expects to complete the new program by Oct. 29, 2027.
“We remain committed to returning surplus capital to shareholders via our ongoing ‘evergreen’ share buyback program,” the company said, describing the repurchases as an additional source of shareholder returns alongside its dividend policy.
Between fiscal 2021 and fiscal 2026, Imperial said it returned approximately £13 billion to shareholders through dividends and share repurchases. It expects year-end leverage to remain near the lower end of its target range of 2.0 to 2.5 times net debt to EBITDA.
The company will report its full fiscal 2026 results on Nov. 17.
