British American Tobacco warns of earnings hit thanks to currency headwinds
Full year earnings growth at British American Tobacco (BAT) is set to fall seven per cent due to currency headwinds, the cigarette company said in a trading update today.
However, the FTSE 100 firm said its next generation products division, including vaping and heated tobacco products, will grow by double digits to reach £900m in revenue for 2018.
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BAT's Vuse brand is performing well in the US with its Vibe and Alto products both selling well, it said, while its Vype brand continues to grow its share of the e-cigarette market, with its E-pen 3 product showing promise in the UK and Canada.
The next generation products business was expected to net £1bn revenue for 2018 but BAT said the revision was driven by a reduction in planned year-end stocks in Japan, while malfunctioning batteries in its Vuse Vibe vape kit led to a recall in the US.
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Chief executive Nicandro Durante said: "I am delighted with the progress we are making with our Potentially Reduced Risk Products business and we have a great pipeline of new product launches over the coming months which will build on this success.
“At the same time, our combustible tobacco business continues to perform well. We remain on track for a strong performance in 2018."
Shares fell 1.38 per cent in early morning trading following the profit growth update.