Imperial Brands Flags Double-Digit Next-Generation Growth, Backs £1.5bn Buyback
Imperial Brands said next-generation products are on course for double-digit net-revenue growth in fiscal 2026, a milestone the group is using to justify a £1.5 billion share repurchase for the coming year.
In a pre-close trading update released Oct. 8, the company projected market-share gains across all three of its next-generation categories — heated tobacco, vape and modern oral — alongside low-single-digit growth in core tobacco net revenue for a sixth consecutive year. Unless otherwise noted, figures are stated at constant currency.
The tobacco business continued to outperform, with pricing and volume discipline credited for a sixth annual increase in combustible revenue. The company said it expects Group adjusted operating profit to grow 3 to 5 percent, adjusted earnings per share to rise at a high-single-digit rate, and free cash flow to exceed £2.2 billion in fiscal 2026. Full-year results for the period ending September 30 will be published on November 17.
Next-generation momentum was led by heated tobacco, where the company attributed strength to Pulze 3.0 and newly launched iD sticks. Its vaping portfolio, anchored by the blu kit range, remained a steady contributor, and the modern-oral line, built around Zone and Skruf, was broadened through the acquisitions of Black Buffalo in the United States and Helwit in Sweden.
In the first half of fiscal 2026, next-generation net revenue rose 7.5 percent, with growth of 15.3 percent in Europe and 60.0 percent across the Asia, Africa, Australasia and Central and Eastern Europe region. The company reported that its share gains in all three categories held through the period.
The buyback sits against an already active capital-returns programme. Imperial has completed a £1.45 billion repurchase in fiscal 2026 and is announcing a further £1.5 billion for fiscal 2027. Analysts have watched whether the pace of next-generation growth can sustain the premium the market has attached to the company's transition thesis, while traditional tobacco remains a stabilising cash source.
The update was consistent with the group's stated 2030 transformation plan, which aims to grow next-generation revenue while holding tobacco at a sustainable, profitable base. With the second half of the year still ahead of the full-year report, investors will focus on whether the double-digit next-generation trajectory holds and on the cash-flow profile that underpins the buyback.