Shares in multi-national tobacco company Imperial Brands (IMB) recently hit a new five-year high (25 November) of £25.64 despite a push by governments around the world to crack down on the number of people smoking and vaping.

Year-to-date the shares have gained 41% outperforming three of the ‘Magnificent Seven’ group of tech giants said analysts at Panmure Liberum in a recent note.

So, what is the FTSE 100 company which owns several tobacco brands including Davidoff, West, Golden Virginia and JPS doing right?

On the 19 November, Imperial reported a robust set of full-year results buoyed by so-called next generation products (NGPs), essentially the product range beyond cigarettes, as it continued its recent track record of generous capital returns to shareholders.

‘We are on track to deliver five-year capital returns of circa £10 billion, representing 67% of our market capitalisation in January 2021 when we launched our strategy,’ said chief executive Stefan Bomhard.

The company reported a 4.6% increase in net revenue (less duties and sales of peripheral products), a 4.5% rise in operating profit to £3.5 billion and a 26% rise in NGP net revenue to £335 million with growth from all regions and improved gross margins.

In the area of vaping, the company launched new blu formats to meet demand across several markets and said its market share in heated tobacco continues to grow in Europe. 

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