Imperial Brands to Cancel Repurchased Shares Under £1.5 Billion Buyback

Imperial Brands reaffirmed full-year 2026 guidance and launched a £1.5 billion buyback, with HSBC running the first £750 million tranche.

Imperial Brands has confirmed its full-year 2026 targets and set out the mechanics of a share buyback programme that will see every repurchased stock retired, permanently shrinking the number of shares in circulation. The Bristol-based tobacco group reaffirmed its guidance on Thursday, pointing to sustained operating profit growth and strong cash generation.

Under the plan, the entire £1.5 billion earmarked for the coming financial year will be used to buy back stock for cancellation. HSBC Bank plc has been mandated to run the first tranche of up to £750 million, which got underway on Thursday and is scheduled to wrap up no later than 4 May 2027. The broader programme carries an outer deadline of 29 October 2027. By withdrawing the acquired shares rather than holding them in treasury, the company aims to tighten the free float over time.

The buyback follows the completion of a £1.45 billion programme for the 2026 financial year, and the group has already signalled a further £1.5 billion repurchase for 2027.

Management Backs the Story With Dividend Reinvestment

Directors have been adding to their holdings. On 5 October, non-executive directors Susan Clark and Ngozi Edozien each acquired ordinary shares on the London Stock Exchange through the scheduled reinvestment of dividend income — a routine transaction that nonetheless underlined board-level confidence in the equity.

Funding for the capital returns comes from the core business. Imperial Brands expects adjusted operating profit to grow by 3% to 5% in the 2026 financial year, while adjusted earnings per share are forecast to rise by a high single-digit percentage. Free cash flow is projected to exceed £2.2 billion, ensuring the buybacks are financed from ongoing operations rather than borrowed money.

Price Steadies Above Its 50-Day Line

The stock has been recovering after touching an intra-month low at the start of the period. On Friday it closed at €31.65, a gain of 1.3% on the day, and in the latest session it added 0.5% to trade at €31.80. At that level the shares sit 6.5% above their 50-day moving average of €29.85.

Attention now turns to whether the company can deliver the targeted operating margin and free cash flow milestones by the close of the financial year.