Tobacco giant Imperial Brands has announced a shake-up to its dividend policy and a £200 million share buyback.
The firm, maker of Gauloises cigarettes, will abandon its annual 10% increase from next year and instead adopt a progressive policy that takes into account the underlying performance of the business.
Imperial's board said the change "recognises the company's continued strong cash generation and the importance of growing dividends for shareholders, while providing greater flexibility in capital allocation".
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "All this makes sense, a double-digit dividend yield is more than any investor needs or can reasonably expect in the current climate, and throwing more money at shareholders has failed to make the shares more attractive.
Imperial Brands' shares are leading the FTSE 100 risers today: they're up 2.23%.