BAT volume increased

British American Tobacco’s cigarette and tobacco-heating product (THP) volume during the 12 months to the end of December, at 708 billion sticks, was increased by about 3.3 percent on that of the 12 months to the end of December 2017, 686 billion.

On a representative basis – as if BAT had owned Reynolds American Inc and other acquisitions completed during 2017 from January 1, 2017 – volumes fell by about 3.5 percent. BAT said that in its key markets volume was down by 2.7 percent, outperforming industry volume, which was estimated to be down by about 3.4 percent, leading to an increase in market share of 0.4 of a percentage point.

Meanwhile, other tobacco volumes included that of oral pouches, up 93 percent (representative 10.5 percent) to 3.9 billion; that of other oral products, up 119 percent (-4.0 percent representative) to 14.6 million kg; that of vapor products, up 100 percent (35.5 percent representative) to 189 million pods; and that of other tobacco products (including roll-your-own and make-your-own tobaccos), down 6.6 percent (-7.5 percent representative) to 22 billion stick-equivalents.

BAT’s revenue during the year to the end of December, at £24,492 million, was said to have increased by 25.2 percent on that of 2017.

Profit from operations, at £9,313, was increased by 45.2 percent.

Earnings per share (EPS), at 264.0p, and diluted earnings per share, at 263.2p, were down each down by 85.6 percent.

The dividend per share was up by 4.0 percent to 203.0p.

“BAT performed well in 2018, exceeding our target of high single figure adjusted constant currency EPS growth, whilst continuing to invest in long-term sustainable returns,” chief executive Nicandro Durante (pictured) was quoted as saying as part of the company’s preliminary announcement. “The full year effect of the RAI acquisition and a translational foreign exchange headwind of approximately six percent (on revenue and profit from operations) and seven percent (on EPS) distorted the Group’s results…”

Durante said he recognised that “proposed potential regulatory changes” in the US had created some investor uncertainty. “We have a long experience of managing regulatory developments, a track record of delivering strong growth while investing for the future and an established multi-category approach,” he said. “I am confident that my successor, Jack Bowles, will continue to deliver a similar level of sustainable long-term returns as we accelerate our Transforming Tobacco agenda.

“Looking into 2019 we are confident of another year of high single figure adjusted constant currency earnings growth and this confidence is reflected in our Board’s proposal to increase the dividend by four percent.”