Commentary from Fiona Cincotta, a senior market analyst at www.finspreads.com
Imperial Tobacco reported a 5% decline in underlying tobacco sales volume in the first half of the year. However the company has confirmed that it is on track to meet its targets for 2015, which include increasing its dividend by 10%.
The decline in sales was mainly due to political instability in Iraq and illicit trade in Vietnam and of course an increase of people cutting back on smoking due to tighter budgets, tax increases and health reasons. Despite a decline in sales adjusted pricing strategies appear to be offsetting the fall to some degree.
This news has lifted sentiment across the tobacco sector, which had been damaged following disappointing results from rival British American Tobacco