British American Tobacco (BATS) expects to deliver revenue growth in its new categories, including tobacco heating products and vapour, around the mid-range of its 30 per cent to 50 per cent guidance this financial year. Revenue growth from these products was said to be “approaching” this guidance range during the first half, after trading had been hurt by regulatory uncertainty in the US and the unwinding of high inventories at the end of last year. But sales are expected to accelerate in the second half with new product launches.
Traditional combustible cigarettes were said to have performed “strongly” thanks to growth from the strategic brands and good pricing, despite the expectation that volumes sold across the global industry are to fall by around 3.5 per cent by the full year. Overall group sales are expected to be in the mid-upper half of the long-term guidance range of between 3 per cent and 5 per cent, with operating profit growth in the upper half of 5 per cent to 7 per cent guidance.
