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Imperial Brands says growth near top of range, eyes U.S. vaping crackdown

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By Reuters
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(Reuters) – Imperial Brands Plc said on Wednesday it expected annual net revenue growth to be at or above the upper-end of its forecast range while flagging ongoing uncertainty over U.S. regulation of e-cigarettes.

The British company said it expected volumes at its core tobacco business to be “slightly” behind the second half of last year, including in the United States, after recent price increases.

Revenue from tobacco is expected to grow modestly in the year and the company said it was on track to meet its full-year earnings expectations, with growth in the range of 4 percent to 8 percent. It has forecast revenue to grow between 1 percent and 4 percent.

Shares in the company were roughly flat at opening.

The market in next generation vaping products like myblu towards which a number of tobacco companies are transitioning has come under scrutiny in recent months as U.S. regulators worried over a surge in teenage users.

Imperial is among a handful of major firms, including market leader Juul Labs Inc, to have made promises last year to the U.S. Food and Drug Administration of action to prevent sales to minors.

Commissioner Scott Gottlieb has said the regulator should consider whether pod-based nicotine products should be sold at all and the FDA released formal plans earlier in March to curb sales and make producers reapply for permission to keep selling them.

Imperial said that overall myblu was performing well with increased investment driving brand awareness with smokers and vapers and significant year on year revenue growth.

“In the USA, we have achieved good year-on-year revenue growth, despite some constraints due to market uncertainty following statements by the US Food & Drug Administration,” it said.

Operating profit for the first half of the year benefited from underlying tobacco profit growth offsetting the investment of 100 million pounds into e-cigarette blu.

Shares of the company were down about 1 percent at 2,549 pence in morning trading.

(Reporting by Sangameswaran S in Bengaluru; editing by Patrick Graham)