Shares rise at British American Tobacco on vaping sales targets
The Dunhill and Lucky Strike cigarette maker climbed more than 2% on the London Stock Exchange.
Shares in British American Tobacco (BAT) have jumped after the firm said sales of next generation products (NGP), such as e-cigarettes, would hit £500 million this year.
The Dunhill and Lucky Strike cigarette maker climbed more than 2% on the London Stock Exchange as it unveiled a string of ambitious revenue targets for NGP.
The FTSE 100 firm said next generation sales were on track to double in 2018 to £1 billion, before rising to £5 billion in 2022.
It added that NGP – which includes tobacco heating products and its vaping business – was likely to break even next year and chalk up a “substantial profit” in five years’ time.
Chief executive Nicandro Durante said the company was “confident of another good year of earnings growth at constant currency”.
He added: “Our NGP business has real momentum and our confidence is reflected in the financial objectives we have set out.”
Updating investors, the company said foreign exchange rates had the potential to boost annual earnings and operating profit to the tune of 5.5% and 6.5% respectively.
BAT, which employs 55,000 people globally and sells into 200 markets, agreed to pay $49.4 billion (£40.8 billion) to take full control of US rival Reynolds earlier this year.
The world’s biggest tobacco firm booked revenues of £14.8 billion last year, with adjusted profits of £5.5 billion.