British American Tobacco (BAT), the maker of Lucky Strike and Dunhill, has raised its full-year revenue outlook, saying demand for its products has been resilient during the Covid-19 pandemic, while a further boost came from an earlier-than-expected lifting of SA’s tobacco ban.
BAT expects a global volume decline of cigarette and tobacco-heating products of about 5%, having previously expected a fall of about 7%.
This reflects the earlier-than-anticipated lifting of the sales ban in SA, continued resilience in developed market volumes, as well as an improvement in emerging-market volumes, the group said in a pre-close update.
BAT had gone to court to challenge SA’s almost five-month tobacco ban, which was ultimately lifted in August as SA moved to level 2 lockdown. BAT said in August that it estimated the ban was costing it about £25m (R500m) in profit a month.
BAT expects constant-currency adjusted revenue growth in its year to end-December to be at the higher end of the 1% to 3% range it advised previously, or a rise of up to £775m.
The group adjusts for some items that temporarily distort revenue, such as those related to third-party contract manufacturing arrangements, which temporarily inflate revenue and the cost of sales without an effect on profits.
In morning trade on Wednesday, BAT’s share was up 1.13% to R580, having fallen 2.91% so far in 2020.
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