Fags maker British American Tobacco PLC (LON:BATS) coughed up better-than-expected numbers for the first half of the year.
While the company bombed out an astonishing 332bn cigarettes during the period, up 3.4% year-on-year, it also had its eye on the next generation of nicotine addicts with what it calls its “next generation products” that cater to the electronic cigarette, or vaping, market.
The global vapour products category continues to grow at a significant rate and, following the geographic expansion of its Vype vaping brand, BATS is now present in the biggest vapour markets outside of the US.
“Vype is performing extremely well - having reached 9% category retail share of market in the UK, as measured by AC Nielsen, and an estimated category retail share of 8% in Germany and 5% in France,” the tobacco products leviathan told investors.
Revenue in the first half of the year rose to £6.67bn from £6.40bn in the first half of 2015. The market has been expecting a revenue figure of around £6.6bn.
Profit before tax eased to £3.43bn from £3.50bn the year before, but adjusted diluted earnings per share grew to 111.1p, ahead of the consensus forecast of 110p, from 100.2p in the first half of 2015.
The interim dividend was nudged up 4.0% to 51.3p from 49.4p last year.
“All geographic areas saw positive volume growth apart from the Americas in H1. Constant rate profits advanced in both Western Europe and EEMEA while being down in both Asia-Pacific and the Americas,” noted Chris Wickham, the analyst covering the fast moving consumer goods market at broker Whitman-Howard.
“Overall, these results were fine and the outlook statement looks positive. BAT will be a significant beneficiary from sterling weakness in the second half of the year,” Wickman noted.
Shares rose 40p, or 0.8%, to 4,786.5p in a falling market in early deals.