FTSE Movers: Imperial Tobacco climbs on profits; Pace pounded

Imperial Tobacco (IMT.L) led the FTSE 100 higher on Tuesday on the back of upbeat half-year profits, while BG Group (BG.L) dropped after posting a 38% fall in net profit for the first quarter.

Shares in Imperial Tobacco advanced 59p to £22.16, a 3-year high, after the firm said half-year earnings rose 6%. Imperial, maker of Davidoff cigarettes, also announced higher future dividend growth and a £500 million share buyback.

Alison Cooper, chief executive, said she was focused on maintaining sales growth momentum and delivering a strong performance in the second half. ‘We have the assets, the capabilities and the opportunities to continue to create significant value for our shareholders,’ she said.

Following the results, Martin Deboo, analyst at Investec, said there were ‘no major surprises’ in the profits and that the buyback had been expected. But he added, ‘We think the early timing will be positive for the shares this morning,’ reiterating the bank’s ‘buy’ recommendation and £23.00 price target for the stock.

Investors check in to IHG

Intercontinental Hotels Group was another big gainer, climbing 33p to £12.82, after reporting a 28% rise in first-quarter profit following a rebound in travel in the Americas.

The Holiday Inn owner said net income rose to $69 million (£42.2 million), up from $54 million a year earlier, and that global revenue per available room grew 6.9% – with 18.8% growth in greater China and 8.4% in the US.

Greg Johnson, analyst at Shore Capital, branded the underlying trading ‘strong across the board.’

However, he said the broker expected ‘some modest downgrades’ to its full-year 2011 pre-tax profit estimate of $450 million, excluding liquidation benefits, as continued strength in underlying trading partially offsets turmoil in the Middle East.

Pace pounded

Among mid-cap stocks, Pace (PIC.L) tumbled 62p, or 40%, to 91p after the set-top box maker issued a profit warning in the wake of supply chain issues due to Japan’s earthquake and tsunami, as well as weak performance from the firm’s European business unit and a rise in costs.

‘In theory, given that this is not a market but an inventory management issue, any further share price falls should be a buying opportunity,’ said Alex Jarvis, analyst at Peel Hunt, in a research note.

But he went on to say: ‘Scepticism remains high in this stock, with low argins/margin sensitivity being one of the key concerns.’