British American Tobacco (BAT) has said that soaring premium cigarette sales and strong vaping demand in the US helped it to beat half-year profit targets.
Shares in the tobacco giant lifted higher on Friday after the Dunhill and Lucky Strike manufacturer reported an 18.8% jump in pre-tax profits to £4.59 billion for the six months to the end of June.
It said revenue increased by 0.8% to £12.2 billion for the period, as sales of more expensive cigarettes offset a slump in volumes.
The company added that Covid-19 pushed adjusted revenues down by 4% for the half-year.
Our Chief Executive Jack Bowles pays tribute to BAT’s staff, customers, partners and suppliers as our 2020 Half-year Report is released. Read the report: https://t.co/jldufIelV6 #BATresults pic.twitter.com/VtcjAX5Xqs
— BAT Press Office (@BATPress) July 31, 2020
Volumes in developed markets were “largely unaffected” by the virus, it said, while some emerging markets, such as South Africa, Mexico and Argentina, saw sales hit by government-mandated factory closures and sales restrictions.
BAT said revenues from its vaping business jumped by 41% to £265 million as it was boosted by strong sales of its Vuse brand in the US, Canada and Spain.
The company said it expects revenue growth of between 1% and 3% for the full year, assuming the global recovery from the pandemic continues in the second half.
Chief executive Jack Bowles said: “I would like to thank our staff, customers, partners and suppliers for working tirelessly through this difficult period.
“We expect the coming months to bring continued uncertainty.
“Nevertheless, we will continue to invest in accelerating our strategy.
“Building on our excellent momentum, we are confident that we will exit this crisis as a stronger and better business”
Shares in the company rose by 1.5% to 2,696p in early trading on Friday.