Imperial Tobacco Group reported a 4% decline in underlying tobacco volume for its first quarter, in line with the broader market. It also reported a 1% fall in underlying tobacco revenue, blaming the timing of a price increase in addition to reduced trading in Iraq and lower sales in US.
Like all tobacco companies it is struggling against falling sales as people cut down on smoking as they grow more health conscious. However Imperial Tobacco has diversified into two non-tobacco products showing flexibility in their product portfolio. Furthermore Imperial Tobacco has continued to focus on cost cutting and debt reduction which has enabled it to confirm its goal of increasing its dividend by at least 10% this year. The continued dividend growth makes imperial tobacco a solid income stock which has been noted by investors. The market cheered these results adding 1% to the value of the share which has had a strong year increasing over 36% since February 2014.
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