Yahoo Finance Coronavirus saw people swapping e-cigarettes for tobacco, helping boost sales
Cigarette company Imperial Brands’ (IMBBY) full-year results have revealed a change of the habits of smokers, with a shift from e-cigarettes to tobacco.
This is despite warnings from health professionals around the world that both smoking and e-cigarettes exacerbate cases of COVID-19 with those that smoke likely to see an increased severity of illness and a higher incidence of death.
Imperial said: “It would appear smokers have chosen to allocate more of their discretionary spend towards tobacco.
“More time spent at home has resulted in consumers reducing expenditure in certain areas, such as holidays or going out.”
Lockdowns, restrictions on travel and a boost from fiscal stimulus measures in “several markets” resulted in changes in consumer behaviour, the company said, meaning a “slightly better market size trends for the group overall.”
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Alongside these factors, border closures and widespread groundings as lockdowns swept the globe reduced the level of illicit trade in certain markets such as the UK. This resulted in better volumes of trade in the duty paid market.
COVID-19 also improved volumes of customers buying in bulk and increased demand for “big box” formats as people took less frequent trips to the shops.
Positive moves for tobacco companies offset the more negative effects of COVID-19 on the space. These included temporary closure of some retail. Tobacconists and e-cigarette retailers were not considered essential retailers under the more strict versions of lockdown.
The closure of hospitality outlets also crimped sales in some markets.
Top-line figures showed a full-year adjusted revenue of £7.99bn ($10.57bn). This was up 0.8% in the full year ended 30 September.
Adjusted earnings per share were down 5.6%, sitting at 254.4 pence.
Imperial said that a strategic review is currently underway, the results of this could be released in the capital markets update scheduled for the end of January 2021.
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