British American Tobacco Says Profit Rose on Price Increases
British American Tobacco Plc (BATS), Europe’s largest cigarette maker, said first-half operating profit rose 4 percent as higher prices offset falling consumption.
Adjusted profit from operations increased to 2.94 billion pounds ($4.5 billion), the London-based company said in a statement today. That compares with the 2.95 billion-pound estimate of nine analysts surveyed by Bloomberg. Sales growth, excluding currency shifts, was 4 percent. Chief Operating Officer John Daly will step down, the company also said.
“The business is performing well, and we are confident of another year of good earnings growth,” Chairman Richard Burrows said in the statement.
The maker of Lucky Strike and Pall Mall cigarettes is stepping up the development of alternative nicotine products amid stricter government constraints on smoking. It started selling its own electronic cigarette Vype online in the U.K. yesterday and is waiting for approval for another alternative product that may be introduced on the market as soon as next year.
BAT is “the leader in the reduced risk area, given all the R&D it has carried out over the years,” Erik Bloomquist, an analyst at Berenberg Bank in London, said by e-mail. “Vype is recognition that the market place is evolving quickly and shows they are willing to meet consumer needs with a variety of products.”
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