British American Tobacco PLC (LSE:BATS) has been given some extra time to plan for a smoke-free UK after it was revealed that PM Rishi Sunak’s anti-smoking plans were set to be shelved due to the election.
Today is the last day of Parliament before the election and The Tobacco and Vapes Bill is one law that will be put on hold until after the vote.
Under the plans, Sunak aimed to prevent anyone born after 2009 from legally smoking, essentially gradually raising the minimum age every year
However, the news has not been enough of a positive to stop the cigarette giant’s shares from sliding 3% since the election was called.
Despite the slip in value, BAT remains 2.5% up in the year-to-date, but next Tuesday’s trading update could prove pivotal in its performance.
Analysts noted the difficult conditions that surround the industry and argued that it could be a tough second half of the year for the group.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “British American Tobacco’s full-year guidance of low single-digit growth in both revenue and operating profit may seem unambitious.
“But, with the tobacco market in continuing decline, it’s down to robust pricing and increasing demand for next-generation products, like vapes, to keep financial performance moving in the right direction.
“The company’s already mentioned that this year is likely to be second-half weighted, so investors will be finding out next week just how much heavy lifting will be required for the rest of the year.”
The consensus for full-year revenues is £27.28 billion while underlying earnings are expected to reach £12.47 billion.
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