British American Tobacco (BAT) said on Tuesday it expects to weather a weaker pound and a slowing market for tobacco-heating devices in Japan to report 'good' earnings growth for the full year.
The world's second-biggest international tobacco company by revenue said that trading in the first half of the year was in line with expectations and that adjusted revenue and profit growth would be weighted to the second half due to several items affecting its first-half comparisons.
The maker of Lucky Strike and Dunhill cigarettes said 'good adjusted constant currency EPS growth' was expected to be impacted by a significant currency translation effect of around 9% for the first half and 6% for the full year, at current spot rates.
Cigarette Alternatives
The company also noted that the market for tobacco heating products has slowed in Japan, though its product, glo, was growing and currently had 4.3% of the national market.
Such cigarette alternatives are increasingly important to big tobacco companies, as smoking rates fall.
With device supply constraints now lifted, BAT said it was on track for further Japanese and international roll-outs in the second half of the year.
It said its e-cigarette business also continued to grow, and was on track to launch its Vype ePen3 in Britain in the third quarter.
Trade Update
The company made the comments in a trading update on Tuesday ahead of its half-year results, scheduled for 26 July.
The update comes a day after BAT affirmed its goal for revenue from so-called next-generation products to double this year to more than £1 billion and to reach more than £5 billion in 2022.
That sent its shares up more than 2%. BAT's shares had fallen 27% year-to-date, due largely to uncertainty over the future of those devices, which require a lot of investment.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
