British American Tobacco (BAT) has posted revenue of £20.29 billion in 2017, up 37.6% compared to the previous year, driven by its acquisition of Reynolds American last July.
However, weaker than expected results sent shares falling to an 18-month low on Thursday.
Adjusted organic revenue rose by 6.5% to £15.7 billion, and organic profit from operations increased 7.8% to £5.9 billion.
Volume of cigarettes and tobacco heating products grew by 3.2%, boosted by the £41.8 billion merger deal, but fell by 2.6% on an organic basis.
"The transformational deal to acquire Reynolds American marked a record year in 2017," said Richard Burrows, chairman of BAT.
"The group continued to deliver on its commitment to high single figure constant currency earnings growth, substantially reinforced the long-term sustainability of that growth with the largest acquisition of a tobacco company ever completed, and achieved significant success in its Next Generation Products (NGP) business."
Group Progress
In 2017, BAT says that it continued to investment in the development of NGPs, which includes vaping and tobacco heating products, with a national roll-out of Glo in Japan, as well as launches in five new markets.
The group's cigarette market share grew by 40 basis points, driven by the Dunhill, Kent, Lucky Strike, Pall Mall and Rothmans brands, with volume up by 7.6% on an organic basis.
Looking ahead, BAT says that it plans to 'accelerate its ambition to transform tobacco'.
"This is an exciting time for the group and the board has confidence in the group’s ability to continue delivering sustainable growth in the years to come," Burrows added.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
