Imperial Tobacco Says Performance Meets Forecasts

Imperial Tobacco Group Plc, Europe’s second-largest traded cigarette maker, said business so far this fiscal year is meeting company forecasts due to gains in Asia, the Middle East, and Africa.

The company is “on track” to deliver 180 million euros ($242.6 million) in cost cuts and efficiencies by the end of the fiscal year in September, Bristol, England-based Imperial Tobacco said today in a Regulatory News Service statement.

Better-than-expected sales in Asia, the Middle East, and Africa will be offset by weaknesses in some European Union countries, particularly Poland and the Netherlands, and in travel retail, the company said.

Imperial bought Altadis SA, the Spanish maker of the Gauloises brand, and Commonwealth Brands, the fourth-largest U.S. cigarette maker, last year to reduce a reliance on declining markets. The quantity of cigarettes sold in the U.K. contracted 4 percent in 2008, while Germany shrank 2 percent.

“It’s a solid and reassuring statement, supportive of the market’s expectations,” said Martin Deboo, an analyst with Investec Securities who has a “hold” recommendation on the stock.

Imperial Tobacco dropped 43 pence, or 2.7 percent, to 1570 pence in London. The shares have declined 15 percent this year, giving the company a market value of 16 billion pounds ($23.3 billion).

Alison Cooper, the company’s controller and corporate development director, was named to the new role of chief operating officer, reporting to Chief Executive Officer Gareth Davis. This makes Cooper, 42, a candidate to succeed Davis, 58, when he steps down, Deboo said. She joined Imperial in 1999 after previously working for PricewaterhouseCoopers LP.

Dividend Changes

Interim dividends will now be one-third of the previous year’s full-year dividend, the company said. It will continue to base dividends on “underlying earnings growth.”

Imperial Tobacco said in June it planned to cut 2,440 European jobs after buying Altadis for 12.6 billion euros.