British American Tobacco Sees Strong Adj. Performance In 2019

(RTTNews) - British American Tobacco (BATS.L, BTI), in its second half pre-close trading update, said its business continues to perform well and that its on track for a strong financial performance on an adjusted basis in 2019.

In the second half, the company reported growing share and good revenue growth in New Categories. In vapour, Vuse is growing value share in the US, with Vuse Alto value share up 840bps to 11.1 percent in October. Total Vuse family value share was at 17.5 percent.

Vype continues to grow value share, reaching 11.8 percent in the UK, up 260bps, and 19.2 percent in France, up 790bps in October. In Canada, Vype is the fastest growing brand, reaching a value share of 27.6 percent, up 570 basis points since July.

Looking ahead for fiscal 2019, the company projects high single figure constant currency adjusted earnings per share growth, and constant currency adjusted operating profit growth in the upper half of 5-7 percent long-term guidance range.

The company also projects adjusted operating margin improvement of 50-100bps, and constant currency adjusted revenue growth in the upper half of 3-5 percent long term guidance range.

The company expects strong results in the US. It expects strong constant currency revenue growth in line with the 3-5 percent Group guidance range, supported by good pricing and reduced discounting.

Meanwhile, New Category constant currency revenue growth is now expected at the lower end of range of 30-50 percent, reflecting the slowdown in the US vapour market.

Jack Bowles, Chief Executive, said, "We expect to deliver a strong performance in 2019, building on the good progress we made in the first half. …. We believe that the issues around vaping in the US should lead to a better and stronger regulatory environment in which we are well placed to succeed... We are on track for a strong year."