Imperial Tobacco looks to caffeine and vapes as cigs sales drop

Imperial Brands today said it is experimenting with caffeine energy products as cigarette sales slow and new rules on plain packaging loom.

Imperial said it saw opportunities in caffeine energy boosters, including a tab that melts on the tongue, as well as in vaping products it has been testing.

Next month the UK will ban the sale of cigarettes with logos on the packaging, insisting on standardised packs with large health warning pictures.

This follows moves to put cigarettes behind screens in shops, to try to curb their appeal to young people. Total cigarette sales at Imperial fell by 5.7% in the first half of the year.

Imperial is restructuring the business to focus on its growth and specialist brands Davidoff and Lambert & Butler.

Despite falling sales, adjusted profit before tax climbed 7.4% to £1.5 billion, giving the company the opportunity to raise the interim dividend by 10% to 51.7p a share.

Chief executive Alison Cooper, who recently lost a pay battle with shareholders, said that Imperial was on track to deliver £130 million of cost savings this year.