Imperial: Negative consequences of the sale will wipe out profit growth this year

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Imperial brands (IMBBF) Thursday warned that sales growth would be lower than expected in the year ending September 30, as a result of the regulatory crackdown on vaping products in the United States. The company also expects zero profit growth this year.

"This has led to a marked slowdown in the growth of the vapors category in recent weeks, with a growing number of wholesalers and retailers not ordering or allowing the promotion of vaping products," said the company, which sells vaping equipment in the United States and Europe under the brand name Blu.

"We are continuing to refine our investment to build a strong and profitable new generation product company in a rapidly changing market," the statement added.

According to the company's latest annual report, sales of vaping products "have increased significantly" to reach £ 200 million ($ 250 million) in 2018. Yet this represents only 2.6% of its turnover. Total business of 7.7 billion pounds sterling ($ 9.5 billion) traditional tobacco products and brands such as Salem and Kool.

Shares of Imperial Brands fell more than 9% in London on Thursday, while shares of his rival British American Tobacco (BTAFF) paid more than 3%.
US regulators plan to ban all flavored electronic cigarettes, which some say is particularly appealing to younger users, after nine deaths and 530 cases of pulmonary lesions associated with vapors and e-cigarettes. Several states are considering banning electronic cigarettes altogether.
FDA commissioner says he expects an e-cigarette policy in the coming weeks

The repression of products that tobacco companies see as the future of the industry represents a rapid reversal. Until recently, vaping had been put on the market as a less dangerous alternative to tobacco, and regulators in some countries were associated with this point of view.

Last week, the US retail giant Walmart (WMT) announced that it would no longer sell vaping products.
Giants of tobacco Altria (MO) and Philip Morris (PM) Wednesday ended discussions for the meeting in a merger that could have been worth more than $ 200 billion as uncertainty increased. Juul, the e-cigarette start-up, replaced its CEO by K.C. Crosthwaite, who had been director of growth at Altria.

Juul has also announced a new marketing strategy: it will suspend all TV, print and digital advertising and end some of its lobbying efforts. The company, which controls about 70% of the US market, said it pledged to fully support and comply with any new federal policy on vaping products.

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