MARKET REPORT: Imperial Brands takes a hit as cigarette sales plummet

Tobacco giant Imperial Brands has lost some heat on warning that the lifting of lockdown restrictions is affecting cigarette sales.

The owner of Lambert & Butler and Rizla said that while the effects of the pandemic have benefited his cigarette business, it is “starting to shrink” as lockdown rules soften and collapse further the year next.

Imperial also said its cigarette and cigar business was losing market share. Despite this, the company said it was on track to meet its expectations for the full year, with revenues set to grow 1% due to rising tobacco prices.

Crush it: Imperial Brands said that while the effects of the pandemic had benefited its cigarette business, it was “starting to diminish” as lockdown rules eased

The group also reported “significantly reduced losses” in its Next Generation (NGP) products, which include its Pulze heated tobacco and Blu Vapor brands. Both are considered to be healthier than traditional cigarettes.

NGP is a key element of Imperial’s five-year turnaround strategy defined in January by new CEO Stefan Bomhard.

Plans include an expansion of NGP’s sales in Europe and the United States, as well as increased profitability in the company’s main cigarette markets – the United Kingdom, the United States, Australia, Germany and Spain.

Stock watch – Marshall engine

Auto dealership Marshall Motor stepped up as it raised its profit forecast amid growing demand for used vehicles.

The company said the low supply of new cars due to a shortage of computer chips had pushed up prices for used vehicles.

The company reported that in the third quarter of the year, the value of used cars rose 13 percent on average.

As a result, Marshall said he expects to generate at least £ 50million in profit for 2021, £ 10million more than his previous forecast last month.

Shares jumped 7.7%, or 16p, to 224p.

“Imperial continues its strategy of focusing on quality rather than quantity in terms of its global footprint… with the number of smokers decreasing, the only lever to be leveraged is higher prices.

Having a significant market share and a recognizable brand name is paramount, ”said Laura Hoy, analyst at Hargreaves Lansdown.

“Fuels are still the engine of growth, but NGP is ultimately the future. So far it has received mixed reviews, but management has managed to cut some of the fat by exiting less profitable markets.

Shares were down 3.8%, or 58.5p to 1495p, as investors worried about the risk to cigarette sales.

The FTSE 100 fell 1.15%, or 81.23 points, to 6995.87, while the FTSE 250 fell 1.51%, or 344.03 points, to 22,386.62.

Fears of ‘stagflation’ – or weak economic growth and rising prices – continued to haunt investors amid continued supply chain disruption and soaring costs of the economy. ‘energy.

Things haven’t been helped by the sharp swings in the price of natural gas either.

Recruiting firm Page Group was one of the biggest gains in midcaps, jumping 7.8%, or 48p to 660.5p, as it raised its earnings forecast amid a post rebound. -pandemic in the labor market.

The company said growth was boosted in the third quarter by a boom in hiring in the tech sector, and now expected annual profit of £ 155million, up from previous estimates of between £ 125 million and £ 135 million.

The update received a positive reception from analysts at Kepler Cheuvreux, who said Page was “very well positioned” to benefit from the reopening of the economy.

Banking giant HSBC got a boost, rising 3.4%, or 13.3p to 406.3p after being upgraded to “buy” from “neutral” by UBS analysts, who also increased their target price on the share to 485p from 450p.

The broker said the company was at “an inflection point” and the stocks were “attractively valued”.

Construction firm Galliford Try has said it has been added to a £ 1.6 billion public sector framework that will cover new construction, renovation and infrastructure projects. Stocks rose 0.3%, or 6p to 173p.

Customer review website Trustpilot fell 8%, or 30.6 pence, to 350.8 pence as one of its executives gave up just over 100,000 shares.

Donna Murray Vilhelmsen, director of human resources at the Copenhagen-based company, bought 68,172 shares at 43 pence each and another 39,000 at 51 pence each, for a total of around £ 49,436.

She then sold them for 375 pence each, or £ 401,895 in total, taking her in a profit of £ 352,459. The sale price was a 1.7 percent discount from the company’s closing price on Tuesday.

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