(Adds details on outlook, analyst and CEO comment)
June 8 (Reuters) - British American Tobacco raised
its annual revenue growth forecast on Tuesday as the cigarette
maker's focus on e-cigarettes and tobacco-heating devices pays
off, sending its shares up 2%.
The London-listed company said it expected revenue growth of
more than 5% at constant currencies, above its previous range of
3% to 5% for the year to December. It stuck to its growth
expectation for adjusted earnings per share in the mid-single
digit range.
The maker of Lucky Strike and Newport cigarettes said its
"new category" reduced risk products had gained share in all key
markets, including the United States and Japan, with the company
adding 1.4 million new customers in the first quarter.
The company, which sells Vuse e-cigarettes and glo tobacco
heating products, said users of its new category products now
totaled 14.9 million.
"The upgrade and delivery around reduced risk products is
particularly encouraging", Jefferies analyst Owen Bennett wrote.
BAT's comments show more customers in the United States are
switching to e-cigarettes before a possible U.S. ban on menthol
cigarettes and flavoured cigars.
BAT said it expected its full-year sales volumes to show a
better performance than the broader industry, which is expected
to see a 3% slide this year. BAT said it expected sales to be
boosted by a recovery in markets such as Bangladesh, Pakistan
and Vietnam.
The outlook for the U.S. industry volumes remained unclear,
BAT said, blaming "macro-economic and fiscal" uncertainties.
The company also said it was seeing strong uptake of its
oral nicotine products in Sweden and Norway, where it now
controls more than 50% volume share in both markets.
"We continue to expect 2021 to be a pivotal year for the
business, with accelerating new category revenue growth (and) a
clear pathway to new category profitability," BAT Chief
Executive Jack Bowles said in a statement.
BAT has invested nearly 500 million pounds ($707 million) in
its new category products business last year and has set a
target of achieving 5 billion in sales for the business by 2025
and 50 million customers by 2030.
($1 = 0.7075 pounds)
(Reporting by Siddharth Cavale and Pushkala Aripaka in
Bengaluru; Editing by Subhranshu Sahu, Sriraj Kalluvila and
Edmund Blair)