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Thursday, 4 February 2010

See what they did there?

FOUR decades!

Imperial Tobacco reports first rise in British cigarette market in four decades

Imperial Tobacco said yesterday that the annual duty-paid cigarette market in the UK had increased by 1 per cent to 45.5 billion cigarettes in 2009, while the fine cut tobacco market grew by 21 per cent to 4,650 tonnes. It is the first time that the number of cigarettes sold in the UK has risen in almost four decades.
Yes, forty years.

Shall we file this in the same folder, labelled epic fail, as record youth smoking in Scotland, a halt in smoker decline in England, and 'alarming' jumps in smoker numbers in Ireland and Italy following implementation of bans which entirely eradicate choice?

Forty long years of steady progress reversed by a naïve, and historically illiterate, notion that humans are even remotely swayed by overbearing authority and shades of prohibition.

Big tobacco now has money to burn, quite literally.

Ms Cooper said that Imperial was in the final stages of integrating Altadis, the maker of Gauloises and Gitanes that it bought for €12.6 billion in 2008, and would be back on the acquisition trail soon.
Ooh, how must that sting the anti-tobacco hysterics? Even the aid of a recession can't dampen the sales of their arch enemies after the massive boost of the smoking ban that ASH, and their similarly head-slappingly inept coalition partners, pushed as the magic ingredient for a future without smoking.

As if that wasn't enough torture, the Telegraph wades in with a tip for sage investors.

The shares are trading on a September 2010 earnings multiple of 11.6 times, falling to 10.6 next year, which does not look expensive. The current year prospective yield is 4pc rising to 4.6pc in 2011 – well worth having.

The shares were first recommended on November 30, 2008, at £16.18 a share. They are now up 27pc compared with a market up 22pc.

However, the shares are a yield play rather than a capital appreciation play, although as debt is reduced the share price should improve. On this basis the stance remains buy.
Fill yer boots! With enemies like ASH pushing policies which increase consumption for tobacco companies on the back of human nature, who needs friends?

1 comment:

Curmudgeon said...

Well, there goes the alcohol market. Pubs may close in their thousands, but sales of minimum-price take-home lager and vodka will continue steadily.

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