Imperial Tobacco Group Plc, the maker of Davidoff cigarettes, said it expects net revenue from tobacco to rise about 3 percent this fiscal year as price increases offset a decline in deliveries.
Cigarette shipments have been similar to the first nine months of the year, when they dropped 4.3 percent, Bristol, England-based Imperial Tobacco said today in a statement. Loose- tobacco volume will probably rise 6 percent for the 12 months through Sept. 30, meaning total tobacco sold will show a decline of about 3 percent, the company said.
"Solid pricing and strong fine-cut tobacco volumes in the fourth quarter are the key positives,’’ Rogerio Fujimori, an analyst at Credit Suisse with an "outperform" recommendation on the stock, wrote in a report.
Tobacco companies will be able to increase sales in coming years as they still have pricing power, market research company Euromonitor said yesterday, predicting 2 percent annual growth in cigarette volume worldwide in the next five years.
Imperial Tobacco rose as much as 42 pence, or 2.2 percent, to 1,935 pence and was up 1.5 percent at 9:21 a.m. in London trading. The stock has lost 1.9 percent this year, while the benchmark FTSE 100 Index has gained 2.2 percent.
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