British American Tobacco Raises Smokeless Outlook but Cuts Cigarette Volume Forecast and Expects Lower-End Revenue Growth

British American Tobacco raised its sales-growth forecast for smokeless products such as vapes and nicotine pouches to the mid-teens range from a previous low-double-digit target. 5 percent from the earlier 2 percent projection. Annual revenue growth remains expected at the lower end of the 3-to-5 percent target range, and underlying operating profit is projected at the lower end of the 4-to-6 percent medium-term guidance.

Profits are expected to be weighted toward the second half of the year, supported by a stabilising performance across Asia Pacific, Middle East and Africa and by savings from the company’s cost-cutting programme. The company said it is closely monitoring developments in the Middle East.

“While there is no significant impact on the group at this time, the broader macroeconomic and geopolitical backdrop is dynamic, increasing the risk of volatility in consumer sentiment should uncertainty persist,” it stated.

Growth in the new-category products is being driven by oral and vaping items, with major brands including the Vuse vape line and the Velo nicotine-pouch brand. The company said the Velo brand continued to deliver excellent revenue growth globally. Tadeu Marroco, chief executive, said the group’s full-year delivery remains firmly on track.

British American Tobacco aims to become a predominantly smokeless business by 2035. Smokeless products accounted for about 18 percent of total revenues last year, while cigarette brands such as Lucky Strike, Pall Mall and Dunhill made up the remainder. 6 billion.

Shares in British American Tobacco fell 4 percent in early trading on Tuesday.