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(Reuters) – British Imperial Brands tobacco company Plc <IMB.L> announced Monday the proposed buyback of shares worth up to £ 200 million and announced that it would revise its dividend policy from next year.
The company has reaffirmed an increase in the final dividend of 10% for the current fiscal year and said that its dividend policy would be more gradual and that the payments would increase each year starting next year, taking into account the performance underlying society.
Cigarette maker Davidoff, Parker & Simpson and Gauloises Blondes are looking to invest more in their vaping products such as blue electronic cigarettes and other growth sectors as sales of traditional cigarettes fall.
According to pre-market indicators, the company's shares, which have fallen more than 17% since the beginning of the year, should reach 4%.
The Imperial also said that it intends to sell its global premium cigar business with the goal of divesting badets worth 2 billion pounds from here to May 2020 was on track.
The company said the revised capital allocation policy will invest in organic growth and opportunities for mergers and acquisitions in the tobacco and next generation sectors.
"Given IMBWe do not believe that the market is rewarding its current div policy and we view change as an opportunistic opportunity to reduce leverage and buy back shares at depressed levels, "said Credit Suisse badysts.
Imperial Oil is also seeking a net debt / net income ratio of 2 to 2.5 times.
The company announced weaker-than-expected electronic cigarette sales in May, citing a slowdown in the United States.
(Report by Tanishaa Nadkar and Noor Zainab Hussain in Bengaluru, edited by Saumyadeb Chakrabarty)
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