Shares in British American Tobacco (BAT) fell almost 4 percent after it lowered revenue and profit growth estimates for this year by a couple of percentage points each.
In adjusting its guidance, BAT pointed to a worsening outlook for an industry that had previously reported little impact from the coronavirus pandemic on sales and operations.
The company also pushed back its target for reaching £5 billion ($6.3 billion) in sales from next-generation products like e-cigarettes to 2025 from 2023–2024.
At the start of the pandemic, BAT insisted the coronavirus disruption was having little impact on consumer demand. During a recent conference call, however, CEO Jack Bowles said that earlier numbers had covered periods when many of its markets were still in the early stages of lockdowns.
BAT now expects adjusted revenue growth of 1–3 percent this year instead of 3–5 percent while earnings per share are anticipated to be up by a mid-single digit rather than a high-single digit percentage.
Nonetheless, the company will continue its dividend policy of paying out 65 percent of profit.
“All things considered, British American Tobacco has been doing relatively well against a very difficult backdrop,” said Russ Mould, investment director at AJ Bell.