It was very much a “jam tomorrow” message from Alison Cooper, chief executive of Imperial Tobacco, today.
Analysts were sent scurrying to tweak down their 2014 profit forecast after she spoke of “modest” earnings growth for next year.
Yet the shares rose as Cooper made it clear this was not due to continuing tough market conditions but rather on her plans to cut costs. She has already taken £30 million of annual operating costs out and remains confident that she will hit her 2018 target of £300 million.
One sign that these plans are working was that Imperial’s top brands volumes declined by only 2% in a global market where cigarette volumes fell by 4%.
Imperial shares have underperformed the stock market by 18% so far this year and have barely moved over that time. But there are few companies who can promise 10% dividend growth and offer a 5.6% yield on next year’s forecasts.
These are shares to tuck away and bet on Cooper getting it right for 2015.
