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Investing.com -- British American Tobacco (LON:BATS) (NYSE:BTI) reaffirmed its full-year guidance on Thursday after delivering better-than-expected first-half (1H25) results, pushing its shares more than 1% higher in London trading.
The company said it remains on track to reach the upper end of its 2025 revenue growth target of 1% to 2% at constant exchange rates and anticipates a 1.5% to 2.5% rise in adjusted profit from operations.
In the first half, adjusted operating profit came in at £5.39 billion, slightly ahead of last year’s £5.33 billion and above the company-compiled consensus of £5.21 billion.
Revenue slipped to £12.07 billion from £12.34 billion, though this too exceeded the £12 billion forecast.
The company said its U.S. revenue, which accounts for roughly 44% of group sales, rose 3.7% at constant currency in the first half. Growth in its new category products was 3.9%, supported by strong performance from Velo, its nicotine pouch brand.
The company noted that its smokeless portfolio—which includes Velo, Vuse Ultra premium vapour, and glo Hilo heated tobacco—now represents over 18% of total revenue.
"We would expect a gently positive share price reaction today given the reassurance regarding the strong growth potential of Velo Plus and the robust U.S. combustibles topline growth in 1H25," Jefferies analysts said in a post-earnings note.
"BAT is, in our view, at an early stage of a successful transition towards a Smoke Free Products-centric portfolio," they added.
Analysts expect BAT to generate £25.43 billion in full-year revenue and £11.20 billion in adjusted operating profit, compared to £25.87 billion and £11.37 billion, respectively, in 2024.
Revenue from BAT’s newer product categories—such as vapour, heated tobacco, and oral nicotine pouches—was steady at £1.65 billion in the first half.
The company expects growth in these categories to pick up to the mid-single digits in the second half.
British American Tobacco also boosted its share buyback plan for the full year to £1.1 billion.