Demand for tobacco-heating products and e-cigarettes boost BAT

London — British American Tobacco (BAT) reported higher first-half sales on Thursday, helped by higher demand for e-cigarettes and tobacco-heating products, and said revenue growth would accelerate in the second half of the year.

The Lucky Strike and Dunhill cigarette maker, which is the world's number two tobacco company, said its first-half revenue rose 4.6% to £12.17bn beating an average forecast by analysts of £12.09bn.

The company said growth came mainly from its new categories that include modern oral products, e-cigarettes and tobacco heating products, with revenue from that category rising 27% to £531m the first half.

Europe and Canada led e-cigarette demand, while Japan led demand for its tobacco-heating product, glo, and Russia for oral products, said Simon Cleverly, group head of corporate affairs.

BAT also said that in May the BAT UK Pension Fund entered into a buy-in transaction with Pension Insurance Corporation, to transfer £3.4bn of assets.

The deal secures benefits for 10,600 members, including 8,300 pensioners and 2,300 nonpensioners.

The Pension Insurance Corporation separately said the deal was the third-largest transaction in the UK and was the largest to date including both pensioner and deferred members.

BAT's adjusted earnings per share came in at 149.3 pence, beating analysts' estimates of 146.15p, according to Refinitiv's I/B/E/S.

BAT also said it was on track to be “around the middle” of its guidance range of 30%-50% of annual revenue growth from new categories, on a constant currency basis.

Reuters