Lucky Strike maker British American Tobacco has reported a stronger-than-expected annual profit, as it sold more higher priced cigarettes and saw more customers use its e-cigarette and tobacco heating devices during the Covid-19 pandemic.
Sales have proven to be resilient during the pandemic.
This was despite warnings from the World Health Organization and the US Centers for Disease Control and Prevention that have said that smoking makes it harder to fight off the coronavirus.
"We delivered on our targets in what was a very challenging year," the company's chief marketing officer Kingsley Wheaton said.
"For the first year new category losses will reduce and therefore new categories are going to contribute to our full year earnings growth," he added.
BAT's adjusted earnings per share (EPS) rose 5.5% to 331.7 pence, beating analysts' average estimate of 329.87 pence, according to Refinitiv data.
The world's second-largest tobacco company also forecast constant currency revenue growth of 3% to 5% and mid-single-digit adjusted EPS growth for 2021. It expects global tobacco industry volumes to decline around 3% in 2021.
The company also increased its full-year dividend by 2.5% to 215.6 pence per share.
Full-year revenue fell 0.4% to £25.78 billion, beating analysts' average estimate of 25.66 billion pounds.
Revenue from its new categories business rose 15%, boosted by a 52% jump in vapour sales, which includes its Vuse and Vype brands.
Shares of the Dunhill and Rothmans maker fell about 17% last year.
