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Three Quick Facts: Imperial Brands, Vodafone and BAE Systems


Three things you need to know in the financial markets today from investment writer, Tony Cross.

#1. Imperial Brands: FX headwinds take a toll

Imperial Brands LON:IMB published full year results today, noting further growth in next generation products and a 1.5% increase in dividend payments being made to shareholders. Reported revenues have fallen as a result of FX headwinds but the company remains on course to deliver against its five year plan.

For FY 23m performance is expected to be weighted towards the second half, but this parting shot was interesting – “We remain confident in our plans in the face of current macro-economic challenges […] and as we align our business more closely with the secular consumer trend towards healthier moments of relaxation and pleasure, we believe we are well placed to generate long-term value for shareholders and all our stakeholders.” Can we really align vaping with relaxation and therefore herald its positive health benefits?

#2. Vodafone: rising costs trim earnings expectations

Half year results from Vodafone LON:VOD show group service revenue growth of 2.5% over the first six months and a pre-tax return on capital of 6.9%, up by 0.6%. The interim dividend is being held steady and management add that in the context of a challenging macro environment they are delivering a resilient performance. Steps are being taken to mitigate the impact of rising costs, ranging from structural simplification to passing on these higher prices to consumers. Full year guidance has however been updated, with Adjusted EBITDAaL now set to come in at the lower end of the previously forecast range.

#3. Increased military spending globally and weaker pound bolster BAE

A trading statement from BAE Systems LON:BA. notes strong order intake and operational performance, allowing the company to confirm group guidance for the full year, something that is set to see further support on the assumption that the GBP/USD exchange rate remains depressed. Management adds that many of the countries they operate in have either announced increased military spending or are in the process of doing so, adding further confidence to the outlook. An interim dividend of 10.4p will be paid at the end of the month.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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