Imperial Brands has recorded its best organic sales growth in more than a decade after higher tobacco prices helped the group to offset declines in volume.

The owner of products including Lambert & Butler & Golden Virginia recorded first-half organic growth of 2.8% in the six months to 31 March, as an 8.6% increase in tobacco pricing countered volume declines of 6.3%.

In its latest trading statement, Imperial revealed that its Next Generation Products (NGP) net revenue was up 16.8% as result of building scale in its market footprint as well as product innovation. This was helped by stronger growth in Europe offsetting declines in the US.

While the group revealed that its total revenue dipped by 2.3% to £15.1bn, and its operating profit fell 2.6% to £1.5bn, chief executive, Stefan Bomhard, said Imperial was still performing an “acceleration in financial delivery”.

“Investment in consumer capabilities, more agile ways of working and further progress with our performance culture have made Imperial Brands a stronger business better able to deliver an acceleration in financial delivery,” Bomhard commented.

“This is demonstrated in the first half with the strongest organic top-line growth in more than 10 years, amid a challenging external environment.

“Pricing actions in tobacco taken in the first half and good momentum in NGP gives us confidence in our ability to deliver full-year results in line with our guidance.”

Head of equity research at Hargreaves Lansdown, Derren Nathan, added: “There’s stronger growth in its NGP such as blu vapes, but these are still a tiny part of the mix. It’s tobacco that’s still driving financial performance and management are keeping their balance on the delicate tightrope of asking smokers to pay up more for their habit without collapsing demand.

“Volume declines reflect wider industry trends rather than any specific weakness in Imperial’s product offering. Overall, market share has held firm in its core markets although there have been declines in the UK and Germany.”

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