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BAT Gains on Boost From E-Cigarettes, Oral Nicotine

·1 min read

By Dhirendra Tripathi

Investing.com – ADRs of British American Tobacco (NYSE:BTI) traded 0.4% higher Friday as sales of e-cigarettes, heated tobacco and nicotine grew in 2021, underpinning the company’s focus on growing new categories of business.

Compounding the gains in the stock was a new 2-billion-pound ($2.72 billion) share repurchase program and a 1% rise in the dividend to 218 pence.

Revenue from new categories climbed 51% to 2.05 billion pounds. For the first time, the segment reported a narrower loss, reducing the drag on group earnings growth. BAT said the unit is on track to break even and deliver revenue of 5 billion pounds by 2025.

The company was able to take its non-combustible products such as Vuse e-cigarettes, glo heated tobacco and Velo oral nicotine to 4.8 million more consumers in 2021, capping a year in which pressure from funds, activists and ESG-focused organizations only increased. Over 18 million people now use those products and BAT aims to accelerate the shift to them by increasing investment in the space.

Total revenue in the year rose 7% to near 26 billion pounds.

BAT (LON:BATS) expects revenue growth of 3%-5% this year, and around 9% growth in adjusted EPS. That's despite the long-term structural demand decline for tobacco globally.

Adjusted diluted earnings per share in 2021 were 329 pence.

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