Imperial Brands – No Surprise Here

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Imperial Brands – No Surprise Here
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Imperial Brands PLC (LON:IMB)’s underlying revenue is expected to grow at 1% driven by strong tobacco pricing. Together with reduced losses in Next Generation Products (NGP) and improved performance in Distribution, this should feed into underlying operating profit growth in the low to mid-single digits, as expected.

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Q3 2021 hedge fund letters, conferences and more

DG Value: Targeting Overlooked Opportunities In The Middle Market

Yarra Square Investing Greenhaven Road CapitalFounded in 2007 by Dov Gertzulin, DG Value is a value-focused investment firm. The firm runs two primary investment strategies, the diversified DG Value Funds and the concentrated DG Concentrated strategy. Q3 2021 hedge fund letters, conferences and more The flagship DG Value Fund was launched in 2007, specializing in middle-market distressed situations and event-driven Read More

CEO Stefan Bomhard said, “We have made good progress in implementing our strategy through a sharper management focus, greater investment behind our priority combustible tobacco markets and new market trials in heated tobacco and vapour.”

The shares fell 1.4% following the announcement.

Imperial's Focus On Quality

Laura Hoy, Equity Analyst at Hargreaves Lansdown:

“Imperial’s pressing forward with its strategy to focus on quality rather than quantity when it comes to its global footprint. This is a key part of being a tobacco company these days—with the number of smokers dwindling, the only lever to pull is hiking prices. Having a commanding market share and recognisable brand name is paramount.

Aside from a shrinking addressable market, Imperial’s combustibles business is battling against loosening travel restrictions which are funnelling some customers away from more expensive product offerings. Add to that declining revenue in Australia and a £50m legal bill in the US, and it’s a recipe for profit declines. On the bright side, improved performance in Next Generation Products (NGP) and Distribution should make up for this, with group underlying profit ultimately expected to rise.

Combustibles is still the growth engine for Imperial—but NGPs is ultimately the future. So far it’s had a lukewarm reception, but management’s managed to trim some of the fat by exiting less profitable markets. While the second half will still show the impact of these abandoned markets, a narrowed focus should help the group build out more successful cigarette-alternatives.”


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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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