Profits Drop At Imperial After “Challenging Year”

Profits Drop At Imperial After “Challenging Year”
Sale of Premium Cigar Division in Advanced Stage, Company Names New Chairman

Britain’s Imperial Brands PLC just concluded a disappointing fiscal year, with a steep drop in profits and smaller-than-expected gains in its vaping segment. At the same time, the company has announced a new chairman will soon be leading the board of directors and said the sale of its premium cigar division was at “an advanced stage.”

This is a time of major change and transition for Imperial. Thérèse Esperdy, who presently serves as senior independent director of the board, will succeed Mark Williamson as chairman on January 1. The company is also searching for a new chief executive officer, as current CEO Alison Cooper is stepping down once a successor is found.

In what Cooper called “a challenging year,” profits dropped 21.4 percent, from £1.4 billion ($1.8 billion) to £1.1 billion ($1.4 billion). Revenues rose 5.1 percent, to £31.6 billion ($40 billion) and operating profit was down 8.7 percent, to £2.2 billion ($2.8 billion). Imperial’s fiscal year ended on September 30.

The company’s vaping segment—part of a segment that Imperial calls “next generation products”—didn’t perform as intended. Revenues in that segment were £285 million, compared to £7.7 billion for the company’s tobacco net revenues. Imperial has been caught in the backlash over vaping, particularly in the United States, where 37 deaths have been blamed on e-cigarettes.

Imperial’s premium cigar division is a massive operation that includes half ownership of Cuba’s Habanos S.A., the U.S. distribution and manufacturing rights to such major brands as Montecristo and Romeo y Julieta, handmade cigar factories and the cigar retail site JR Cigar, among other assets.