British American Tobacco (BATS) is confident that it can generate £1bn worth of sales from next generation products by the end of this year. At the interim stage, sales from these products had already grown fourfold to £405m. Breaking this figure down, 71 per cent of these sales came from tobacco heating products and the remaining 29 per cent from vapor devices. Chief executive Nicandro Durante said the £1bn figure was in sight thanks to a range of new product launches aimed at 're-energising' growth from tobacco heating ranges.
Next generation products provide an new opportunity for growth, but the group still generates the bulk of its sales from traditional cigarettes. The group sold 213bn sticks during the last six months, a 37 per cent increase on the same time in 2017. This figured is flattered by the contribution from Reynolds America, but still goes against the wider trend of falling volumes across the industry.
Analysts at Cenkos expect pre-tax profits of £9.4bn during 2018, giving EPS of 296p, compared with £8.1bn and 282p in 2017.
| BRITISH AMERICAN TOBACCO (BATS) | ||||
| ORD PRICE: | 4,191p | MARKET VALUE: | £96.1bn | |
| TOUCH: | 4,191-4,192p | 12-MONTH HIGH: | 5,483p | LOW: 3,553p |
| DIVIDEND YIELD: | 5.6% | PE RATIO: | 2 | |
| NET ASSET VALUE: | 2,721p* | NET DEBT: | 73% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 7.4 | 3.03 | 121.80 | 56.5 |
| 2018 | 11.6 | 3.97 | 117.70 | 97.6 |
| % change | +57 | +31 | -3 | +73 |
| Ex-div: | 04 Oct, 27 Dec | |||
| Payment: | 25 Oct, 17 Jan | |||
| *Includes £120bn of intangible assets or 5,232p per share | ||||
