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BAT says recent US tax reforms to benefit full year 2018 earnings per share by 6%

The cigarette manufacturer said, for the year to 31 December 2017, the announced tax changes will have no impact on its underlying effective tax rate, which the group has previously said is expected to be around 30%
Cigarettes
However, for the year to 31 December 2018, BAT currently anticipates that the changes will reduce the group's effective tax rate to the high-twenty percentage bracket

British American Tobacco plc (LON:BATS) has said that, all other things being equal, the recent US tax reforms would result in a benefit of 6% to its full year 2018 earnings per share.

In a brief statement, the FTSE 100-listed cigarette manufacturer said, for the year to 31 December 2017, the announced tax changes will have no impact on its underlying effective tax rate, which the group has previously said is expected to be around 30%.

READ: BAT says it is continuing to perform well, with trading in line with expectations

However, the firm added that it anticipates that the changes will result in a non-cash exceptional tax credit as a result of the revaluation of deferred tax balances arising from the acquisition of Reynolds American Inc.

Thus, for the year to 31 December 2018, BAT currently anticipates that the changes will reduce the group's effective tax rate to the high-twenty percentage bracket.

READ: BAT expects revenues from "next generation products" to double to over £1bn next year

The group said it is continuing to work through the full impact of the changes and will give more detail in its preliminary announcement for the year ended 31 December 2017 in February.

BAT added that the changes will support its commitment to high single digit earnings growth and increased investment in the roll out of Next Generation Products.

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