BATS took a robust approach to pricing its combustible products in the first half, which saw its market share decline by 0.2 percentage points in its key territories. Across the industry, cigarette volumes are now expected to drop by about 2.5% this year, up from the 2.0% decline previously expected.
New Category sales growth expectations have been upgraded from low double digits to the mid-teens.
However, group guidance for full-year growth remains at the low end of medium-term targets. Those are 3-5% for revenue and 4-6% for underlying operating profit.
BATS remains on track to reduce debt levels to 2-2.5x underlying cash profit (EBITDA) by the year-end.
The shares were down 3.3% in early trading.
Our view
HL view to follow.
British American Tobacco key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
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