BAT reports higher profits on demand for high-priced cigarettes, vapes

British American Tobacco on Friday reported better-than-expected profits, driven by sales of more high-priced cigarettes and strong demand for it vaping products in the US.

The maker of Dunhill and Lucky Strike cigarettes, said profit from operations rose 3.3% to £5.37bn, with revenue up 1.1% to £12.27bn.

Adjusted earnings per share of 157.8p came in ahead of analyst estimates of 156.54p on sales of £12.16bn.

Volume fell 6.3%, as countries imposed international travel bans amid the coronavirus crisis.

The company reiterated it expects revenue growth between 1% and 3% for the year at constant currencies after lowering the target in June, and mid-single figure adjusted EPS growth.

BAT said US industry volumes will fall 2.5% instead of a previously forecast 4%, citing the continued resilience of consumer demand and higher trade stock levels being maintained as a result of Covid-19.

Second quarter industry volumes fell 6%, as emerging markets were hit by government-imposed factory closures and sales restrictions including in South Africa, Mexico and Argentina.