UK: Imperial Tobacco to Cut £300m Costs A Year

Source from:  Electronic Telegraph (uk)  02/27/2013

Imperial Tobacco, owner of the Davidoff and Gauloises Blondes brands, has set out plans to grow dividends by at least 10pc a year for the "medium term".

The tobacco giant intends to slash a further £300m from its cost base every year until September 2018 to support investment and profit growth, Alison Cooper, chief executive told investors in London on Tuesday.

Analysts have suggested Imperial, which is the smallest of the "Big Four" global cigarette manufacturers, could fall prey to a long-speculated takeover as it battles against tough consumer conditions and mounting regulation in key markets such as Europe and Russia.

The group said in a trading statement last month that the legal market for cigarettes in the European Union had shrunk by about 7pc.

Imperial, whose other key brands include West and JPS, said its cost-saving programme, which will amount to about £1.5bn over five years, will commence in October. However, some benefit from existing efforts to reduce its cost base will materialise in the current financial year.

Shares in Imperial closed down 9p at £23.44, valuing the company at almost £23bn. Enditem