FTSE 100, Imperial Tobacco
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Imperial Tobacco (IMT.L) today warned profits from its Spanish division could drop by up to £110 million for the year ending 30 September 2011 compared to previous guidance.
The cigarette manufacturer said it was responding to price cuts from competitors in recent weeks, which have impacted all market participants in the Spanish market, and the company has moved to protect its market position.
Included in the £110 million cut in forecast, the company said £40 million of this represented a one-off non-recurring impact on the logistics division.
The company’s share price dipped last month when members of the Spanish media reported that its Altadis subsidiary was planning to cut the price of its blonde tobacco brands following an aggressive pricing move by rival Phillip Morris.
In a statement delivered to the London StockExchange, the company said it is continuing to monitor the position closely.
Despite today’s announcement, Imperial maintained that the overall group performance is unlikely to be materially impacted when the financial results are released on 30 September, saying they remain in line with the board’s expectations.
Throughout Western Europe, Imperial has a presence in most markets through its Davidoff, West, JPS and Golden Virginia brands.
As at 0845hrs, Imperial Tobacco was already trading down at 2,059, 1.25 per cent down on Friday’s close.
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