British American Tobacco increases cigarette volumes, market share

British American Tobacco reported more smokers puffing on its products on Monday, with increased volumes and market share in the first quarter of 2016.

The FTSE 100 firm said cigarette volumes from its subsidiaries increased 3.6% during the quarter to 158 billion, or 2.4% on an organic basis. Its organic market share also grew, by 20 basis points.

Revenue at the tobacco conglomerate increased 7.5% at constant currency, or 6.1% on an organic, constant rate basis. It improved 1.7% at current rates of exchange.

Cigarette volume in its ‘global drive brands’ - Lucky Strike, Pall Mall, Kent and Dunhill - was up 10.5%, while the board claimed continuing growth in the ‘next generation products’ including electronic cigarettes and medicinal nicotine patches.

"Our momentum has continued with market share in our key markets increasing by a further 20 basis points,” said British American Tobacco chief executive Nicandro Durante.

“Cigarette volume was up 3.6%, with our global drive brands growing by 10.5%. This excellent volume performance reflects the strength of the business combined with the uplift from recent acquisitions and some benefit from inventory movements in the comparator period,” he added.

Durante said the company made good progress with the expansion of e-cigarette brand Vype in new markets and launched its first tobacco heating device glo iFUSE in Romania.

“While profit growth will be weighted to the second half of the year, partly due to the impact of foreign exchange on our cost base, I remain confident that we will deliver another year of good earnings growth at constant rates of exchange."