Imperial Brands took in £7.8bn worth of net revenue compared with £7.2bn one year ago, despite selling fewer cigarettes.
But factoring out positive translational effects, net revenue was actually down 2.6% for the full year.
Across its positions in mature markets like the UK and Germany and growth markets like Russia and China, the firm only sold 265.2 billion cigarettes, 4.1% lower than last year’s tobacco volume of 276.5 billion.
Despite weaker sales growth, Imperial Brand’s shares were trading 3% higher at £31.73 per share on Tuesday as the firm announced it would be raising its dividend 10% to 170.7p, its ninth consecutive year offering a 10% annual hike.
And the group was able to more than double its pre-tax profit over the period from £907m to £1.9bn on a reported basis.
The tobacco giant’s generous dividend has hooked many well-known investors, including Neil Woodford, who has 6.3% of his £9bn equity income portfolio invested in the stock.
Imperial’s shares have fallen close to 17% in the past 12-months, making it one of the most widely purchased stocks of the summer according to Hargreaves Lansdown data.
Nonetheless, chief executive Alison Cooper said it was “an important year of progress” for the tobacco company, as it continued its push into the electronic cigarettes space with its blu E-vapour and “heated tobacco” products.
“Next Generation Products (NGP) offer considerable growth opportunities and we will be significantly stepping up our level of activity in 2018, expanding our portfolio with new product launches in new and existing markets,” said Cooper.
She added that the group’s decision to streamline its portfolio to growth and specialist brands like Winston and Gauloises Blondes, and roll-out of its market repeatable model had yielded better full year revenue and profit and “strengthened the business to support improved top-line growth over the medium-term”.
“We have the strategy and people to succeed in a challenging and changing world and will continue to prioritise opportunities that sustainably create value for our shareholders.”