The company said it was on track to realise proceeds of up to £2bn before May 2020 and will assess the most appropriate use of proceeds at the time, including debt reduction and share buybacks. The Board reaffirms the 10% dividend growth in respect of the final dividend for the current financial year ending 30 September 2019. It also pointed to gearing within a net debt/EBITDA range of 2-2.5 times. News this week that Imperial Brands is ditching a long held policy of hiking its dividend payout by 10 percent every year didn’t come as much of a surprise. The company's shares, which have tumbled more than 17% this year as the wider industry has also suffered from an increased investor focus on ethical investments, rose 2% to be the top gainer on the FTSE 100 .FTSE on Monday. It has been part of the UK’s dividend landscape, with big, reliable and growing payouts (assuming you could stomach its ‘sin stock’ status). The revised capital allocation framework adopts a balanced approach that delivers: As part of this revised capital allocation framework, we are also announcing today a share buyback programme, which will return up to £200 million to shareholders before the end of the current calendar year. To accept, please click 'continue'. A strong but efficient balance sheet with an investment grade credit rating and gearing within a net debt/EBITDA range of 2-2.5 times. The Board of Imperial Brands PLC today announces a revised capital allocation and shareholder distributions policy to support continued growth and optimised returns for shareholders. Imperial Brands Plc Dividend policy Suspended Price as of: OCT 22, 05:49 PM EDT $16.35 -0.06 -0.37% IMBBF: OTC (Stock) Imperial Brands Plc Dividend policy Suspended Price as of: OCT 22, 05:49 PM EDT $16.35 -0.06 -0.37% Watchlist The tobacco company reaffirmed its 10% dividend growth for the current financial year and said the revised dividend policy thereafter will be progressive, growing annually from the current level, taking into account the performance of the underlying business. The move comes as the Davidoff and Gauloises cigarette maker tries to grab a bigger piece of an e-cigarette market dominated by Altria. Bristol BS3 2LL, Registered in England and Wales Broker Liberum said: "We like the revised policy because it should help to restore confidence and credibility to the dividend policy, which is now more realistic and sustainable. "All this makes sense, a double digit dividend yield is more than any investor needs or can reasonably expect in the current climate, and throwing more money at shareholders has failed to make the shares more attractive. Thereafter, the revised dividend policy will be progressive, growing annually from the current level, taking into account underlying business performance. The company expects its vaping products, mainly blu e-cigarettes, to be one of its key revenue drivers and add to profit next year. -backed Juul Inc. "This new policy recognises the company's continued strong cash generation and the importance of growing dividends for shareholders, while providing greater flexibility in capital allocation," it said. Reporting by Siddharth Cavale, Tanishaa Nadkar and Noor Zainab Hussain in Bengaluru; Editing by Emelia Sithole-Matarise and David Evans. , as they focus on turning around their businesses. We support buybacks only when shares are attractively priced and they currently are, so this is accretive to earnings and most importantly, equity. Further active capital management through our ongoing divestment programme, which remains a key priority. Increased investor focus on ethical investments seems to be hitting demand for the shares faster than it’s turning Imperial’s customers off smoking - the share price looks weak even when cash flows remain strong, and Imperial’s whopping great yield is the result. This website uses cookies. The company said on Monday it would increase its dividend payouts annually, but through a more progressive dividend policy that would take into account underlying business performance. “However, there had been growing concerns in the market that its rate of dividend growth was unsustainable if the company were to keep the rate of net debt to earnings at comfortable levels.”. All rights reserved. “Imperial Brands’ shares are popular among retail investors for their generous pay-out,” Russ Mould, investment director at AJ Bell said. Registered Office: It also silences the bears who anticipated a dividend cut. Imperial's decision to be more opportunistic about share buybacks is great news - it shows that the management team is listening and pursuing shareholder-friendly policies.". With the dividend yield now over 10%, management have clearly decided enough is enough, and while payments to shareholders will continue to grow going forwards, share buybacks and debt reduction have moved up the list of priorities. The move comes as the Davidoff and Gauloises cigarette maker tries to grab a bigger piece of an e-cigarette market dominated by Altria MO.N-backed Juul Inc. Imperial Brands PLC "We are happy to see Imperial taking steps to buyback £200m worth of shares by the end of this calendar year. Investment in targeted M&A opportunities to build on the capabilities and technologies of our NGP portfolio and in other growth adjacencies. will drop its 10% dividend growth target from next year to focus on developing its e-cigarette portfolio and plans to buy back shares worth up to 200 million pounds ($251 million) (200.29 million pounds). (Reuters) - British tobacco company Imperial Brands Plc. Recently though that hasn’t been enough to support the share price, which is down over 50% since 2016 despite dividends rising by 10% a year. 121 Winterstoke Road {{ storiesRelated.scrollNewsPercent }}% Complete, Rolls-Royce Lancashire workers vote to strike over offshoring plan, Europe close: Covid-19 restrictions, US stimulus and election uncertainty drag on stocks, FTSE 100 movers: IAG flies lower; Pearson boosted by upgrade, Berenberg raises target price on Renishaw, PrimeStone says St James's Place should set cost-cutting objectives, Imperial Brands revises dividend policy, announces £200m share buyback, US close: Stocks end session lower following fresh daily record for new Covid-19 cases, Sector movers: Covid-19 restrictions, US stimulus doubts weigh on Travel and Oil stocks, London close: Stocks finish weaker as Covid concern continues, Europe midday: Shares held back by SAP warning, Covid curbs, Covid-19 causes precariousness for 6m small UK businesses and 16m jobs, Tuesday preview: US durable goods, BP in focus, US stimulus talks to continue on Monday, but hopes for a deal fading, Broker tips: Pearson, Beazley, Synthomer, Renishaw, Director dealings: Hargreaves Lansdown director ups stake. No: 3236483, Choose the type of Imperial Brands news alerts that you’d like to receive, Collaborating for positive societal impact, Revised progressive dividend growth policy thereafter, Continued investment in growth opportunities, Further deleverage to support a strong and efficient balance sheet, Return surplus cash, including via share buybacks; up to £200m share buyback announced.
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