British American Tobacco said today it expects a small decline in half-year revenue and adjusted profit from operations, but it maintained its forecast of low single digit annual growth.
The maker of Dunhill and Lucky Strike cigarettes has been forced to temper its hopes for revenue and profit growth as it grapples with a tough environment in the US, one of its key markets.
There, both the company's traditional tobacco business and its portfolio of newer products such as vapes are struggling as users switch out its more expensive brands for illegal disposable vapes or cheaper cigarettes.
The company said while the US was showing some early signs of recovery, traditional cigarette volumes were down around 9% so far this year across the industry.
Chief executive Tadeu Marroco said that investments which the company was making in its US unit and elsewhere would set BAT up for a stronger future.
"We expect growing momentum in the second half, enabled by the investments we are making today," he said.
BAT had already warned its performance would be weighted to the second half of the year and that the US market and investments would drag on its results in the near-term.
It said it expects half-year revenue and adjusted profit from operations to fall by low single digits, but it was on track to deliver on its guidance for the full year.
It aims to build back to revenue growth of 3-5% by 2026.
