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Cigarette company British American Tobacco (BAT) is confident of good earnings growth in the financial year to end-December on a constant currency basis.
Cigarette company British American Tobacco (BAT) is confident of good earnings growth in the financial year to end-December on a constant currency basis.

BAT assured of solid earnings growth

RETAILER NEWS

By Marc Hasenfuss - Dec 14th 2017, 09:53

Cigarette company British American Tobacco (BAT) is confident of good earnings growth in the financial year to end-December on a constant currency basis. 

In a pre-closed period trading update released on Wednesday, BAT directors said the business continued to perform well and that trading was in line with expectations.

In a regional market overview, BAT said Canada, Germany, Romania, Bangladesh, and Ukraine performed well, but conditions remained challenging in SA, Russia, the Middle East, Brazil, and Malaysia.

The group indicated that further market share growth was driven by the global drive brands, which include Kent, Rothmans, Dunhill, Lucky Strike and Pall Mall.

Directors noted organic operating profit growth in the second half of the financial year reflected the benefit of the phasing of volume shipments in a number of key markets, including Pakistan. But this was offset by a more difficult pricing environment — including excise tax hikes — in some markets.

BAT expected full-year tobacco volume to be down around 4%, with directors highlighting the group outperforming the industry thanks to its market share gains.

BAT is also gaining traction in the growing new generation product revenues (e-cigarettes and tobacco heated products) segments. The roll-out of tobacco heated product brand glo in Japan was complete, BAT said, adding that glo had continued its excellent performance with national share at 2.7%.

It said glo had also been successfully launched in Switzerland, Canada, South Korea and Russia.

In the e-cigarette segment, BAT said its market share in western Europe continued to grow while the performance of the VUSE brand in the US remained strong.

The integration of recently acquired Reynolds American was on track with the businesses performing strongly, driven by good market share growth and pricing.
© BusinessLIVE MMXVII 

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