Decline in ‘next generation’ products offset by better-than-expected cigarette sales during lockdown

Imperial Brands has hired one of the architects of Costa Coffee’s success to prevent the maker of Lambert & Butler and Gauloises cigarettes falling behind its rivals in the vaping market.

Murray McGowan, previously a troubleshooter at management consultancy McKinsey and Wagamama owner The Restaurant Group, has been appointed group strategy and transformation officer, as new boss Stefan Bomhard stamps his mark on the FTSE 100 firm.

He was Costa’s managing director until 2017. He stepped down as UK boss of  CloudKitchens, the “dark kitchens” business bought by Uber founder Travis Kalanick.

Imperial said trading in so-called next generation products such as e-cigarettes had been “disappointing, albeit in line with our revised expectations”. Revenue would be 30pc lower than last year, it added.

The malaise in vaping was offset by better-than-expected cigarette sales during lockdown. Smokers were spending more on cigarettes, also mitigating a downturn in duty free sales that were hit by Covid-related travel restrictions.

Mr Bomhard said: “In my first three months as CEO I have focused on reviewing our strategy, engaging with employees, and visiting as many of our key markets as possible.

“I expect to be able to share some initial observations about the business when we publish our preliminary results on 17 November.”

Owen Bennett, an analyst at Jefferies, said that concerns among investors that Imperial was losing ground on the likes of British American Tobacco and Philip Morris International had been over exaggerated.

“We think the market has completely written off chances here but we think its ability to drive incremental support in vapour remains strong,” he said.

Read full article here.

Oliver Gill – the Telegraph – October 8, 2020.

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