Lockdown smoking surge boosts Imperial Brands

Cigarette smugglers in Europe have found it hard to ply their trade during the pandemic

The tobacco titan behind Lambert & Butler and Gauloises was boosted by a surge in Britons smoking during lockdown - despite a sales slump in warmer climes as grounded holidaymakers missed out on stocking up in duty-free.

Imperial Brands revealed a 12pc jump in UK sales for the six months to September, while also notching up smaller increases in the likes of Germany and the US.

Sales fell sharply in Spain and the Canary Islands, with tourist numbers lower as a result of crisis-related travel restrictions. It is thought this was partly driven by smokers from Northern Europe unable to stock up while abroad.

The Bristol-headquartered firm, whose stable of brands also includes Rizla and Skruf, also said the number of smuggled cigarettes across Europe had fallen during the pandemic with a lower level of illicit trade in the last year.

Revenues rose 3pc to £32.6bn in the year to September. Pre-tax profit was 28pc higher at £2.2bn.

Imperial shares rose more than 6pc, adding more £700m to the FTSE 100 company's market value.

Tobacco firms are set for a new year sales boost after the UK Government axed duty on sales in airports.

However, Imperial's new boss Stefan Bomhard said it had suffered a difficult year after the firm decided to reduce investment into vaping and other “next generation products” (NGP) as he conducted a wider review of operations.

Mr Bomhard was hired earlier this year to turn around Imperial's fortunes. The company had struggled in the past few years under his predecessor Alison Cooper. 

Imperial has been criticised for lagging behind as rivals shift towards the burgeoning e-cigarette market. This culminated in Imperial slashing its dividend for the first time since 1996 earlier in the year.

Mr Bomhard said: "My first months have been focused on engaging with employees, consumers and customers and leading the strategic review of the business. What I have seen to date confirms my view of the group's solid foundations. 

"I believe there is scope to enhance returns from our tobacco business and opportunities to strengthen our NGP delivery over time.

"I firmly believe we can make a meaningful contribution to harm reduction within a more disciplined, returns-focused framework and we have already taken steps to stem the NGP losses."