BAT Reports 7% Adjusted Revenue Growth and £2B Buyback Plan

British American Tobacco (BATS.L) has reported a 7% increase in adjusted annual revenue and a 1.0% growth in dividends to 217.8 pence. The company also announced a stock buyback plan of £2 billion for 2022.

This tobacco company has reportedly seen a 51% increase in sales of its "new category" product line, reaching £2.05 billion, which includes electronic cigarettes, heated tobacco, and oral nicotine products. While this sector has not yet generated any profits, British American Tobacco says it aims to achieve £5 billion in revenue and profitability by 2025.

The sustained growth of new product categories is the cornerstone of the long-term successful plan of British American Tobacco," said Third Bridge analyst Rosalind Eldred. "With over 1.1 billion smokers still using combustible tobacco, the opportunity to convert consumers to new categories is highly attractive.

With increasing attention on its tobacco heating devices and other electronic cigarettes, a tobacco company raised its annual revenue growth forecast in December last year, resulting in a 2% increase in its stock price. The tobacco company explained that, based on fixed exchange rates, it expects revenue growth to exceed 5%, higher than the previously expected range of 3% to 5% as of December, and maintains its expectations for growth in mid-term earnings per share after a one-time adjustment.

During the first quarter, British American Tobacco added 1.4 million new customers.

The London-based company has reported that the sales of their "new category" of low-risk products have been growing in all major markets, including the United States and Japan. The company gained 1.4 million new customers in the first quarter. "The upgrades and delivery of the low-risk products are particularly encouraging," said JPMorgan analyst Owen Bennett.

The manufacturers of Vuse e-cigarettes and Glo tobacco-heating products have announced that their customer base has increased by 1.4 million, bringing the total number of users to 14.9 million. However, this falls short of their goal of reaching 50 million e-cigarette users by 2025, as this only represents one-third of that target. If BAT is to achieve its goal, sales will have to continue to accelerate.

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