Last checked at 
(Alliance News) - British American Tobacco on Thursday said its transformation continues at pace, with strong revenue and volume growth in all three New Categories driving share gains across key markets.
The Dunhill and Lucky Strike cigarette maker said New Category business is increasingly contributing to its overall performance, and it is confident in delivering its GBP5 billion New Category revenue and profitability targets by 2025.
BAT maintained its 2022 guidance for revenue growth of 2% to 4% at constant currency and mid-single-figure adjusted diluted EPS growth at constant currency.
At current foreign exchange rates, BAT expects a translation tailwind of 2% on adjusted diluted EPS growth for the half year and 5% for all of 2022.
BAT flagged that the global tobacco industry volume is now expected to shrink by 3% in 2022, worse than the 2.5% decline previously forecast, due to the continuing global uncertainty over the ongoing Ukraine and Russia war.
"We are highly cash generative. In line with our active capital allocation framework, and in addition to our growing dividend, we are on track to return GBP2 billion to shareholders through our 2022 share buyback. We are committed to delivering superior long-term shareholder returns," said Chief Executive Officer Jack Bowles.
BAT provided no new information about its exit from Russia. "As previously announced, given the continuing conflict in Ukraine, we are working towards transferring our Russian business in full compliance with international and local laws. Our priority remains the safety and wellbeing of our people in Ukraine and across the wider region," it said.
BAT shares were up 0.7% early Thursday.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: down 0.5% at 7,556.60
----------
Hang Seng: down 0.8% at 21,833.74
Nikkei 225: closed marginally higher, up 12.24 points at 28,246.53
S&P/ASX 200: closed down 1.4% at 7,019.70
----------
DJIA: closed down 269.24 points, or 0.8%, at 32,910.90
S&P 500: closed down 1.1% at 4,115.77
Nasdaq Composite: closed down 0.7% at 12,086.27
----------
EUR: down at USD1.0710 (USD1.0737)
GBP: down at USD1.2520 (USD1.2545)
USD: flat at JPY133.90 (JPY133.94)
Gold: down at USD1,849.77 per ounce (USD1,858.48)
Oil (Brent): up at USD123.47 a barrel (USD122.00)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Thursday's key economic events still to come
1345 CEST EU ECB monetary policy decision
1430 CEST EU press conference with ECB President Christine Lagarde
1100 BST Ireland consumer price index
0830 EDT US initial jobless claims
1030 EDT US EIA weekly natural gas storage report
1630 EDT US foreign central bank holdings
1630 EDT US federal discount window borrowings
----------
Demand from prospective home buyers in the UK fell in May, in what could be a side-effect of the rising cost of living and higher interest rates, according to surveyors. The Royal Institution of Chartered Surveyors said property professionals reported that new buyer inquiries fell in May, with a net balance of 7% reporting falls rather than rises. This was a turnaround from April when a balance of 8% reported rises in buyer inquiries rather than falls. Some professionals put this down to some buyers tightening their belts as the cost-of-living has an effect, and May's result brings to an end eight months in a row of positive results for new buyer inquiries.
----------
Shanghai will lock down a district of 2.7 million people on Saturday to conduct mass coronavirus testing, city authorities said, as the Chinese metropolis struggles to fully emerge from punishing curbs. The city eased many restrictions last week, after confining most of its 25 million residents to their homes since March as China battled its worst Covid outbreak in two years. But the lockdown was never fully lifted, with hundreds of thousands in China's biggest city still restricted to their homes and multiple residential compounds put under fresh stay-home orders. The southwestern district of Minhang, home to 2.7 million people, will be placed under "closed management" on Saturday morning and all residents will be tested, district authorities said in a social media post on Thursday.
----------
BROKER RATING CHANGES
----------
Kepler Cheuvreux raises Informa to 'buy' (hold)
----------
HSBC cuts Compass to 'hold' (buy)
----------
Morgan Stanley raises Britvic to 'overweight' (equal-weight) - price target 940 (985) pence
----------
COMPANIES - FTSE 250
----------
Hospital operator Mediclinic International said its board has rejected a cash takeover offer from existing shareholder Remgro. The offer was 460 pence per share, plus Mediclinic's proposed final dividend for financial 2022 of 3p. "The board of Mediclinic (excluding the Remgro representative) considered the proposal, together with its advisers, and concluded that it significantly undervalued Mediclinic and its future prospects," the London and Johannesburg-listed company said. Remgro also is listed in South Africa. Mediclinic shares were up 2.7% at 436.60p in London early Thursday.
----------
CMC Markets expressed its determination to use its technology to enter new markets and new geographies and expand its non-leveraged offering, as the online trading platform posted a sharp drop in annual profit. For the financial year that ended March 31, net operating income was down 31% to GBP281.9 million from GBP409.8 million in financial 2021 and pretax profit plunged to GBP92.1 million from GBP224.0 million. CMC said it saw a decrease in market volatility, particularly in the first half, compared to "exceptional" levels seen in 2021. This resulted in lower client trading activity and lower client income retention throughout the period which hurt leveraged and non-leveraged businesses, it explained. In addition, total operating expenses have increased by GBP3.6 million to GBP187.6 million, with the main driver being investments in strategic initiatives resulting in higher personnel, professional fees and technology costs. CMC declared a total dividend of 12.4 pence for financial 20222, cut by 60% from 30.6p paid out the year before.
----------
FirstGroup said the series of "unsolicited, conditional proposals" from private equity firm I Squared Capital Advisors undervalue the company. The transport operator said the offer of 118 pence per share in cash, plus 45.6p more contingent on the proceeds of FirstGroup's recent disposals of First Transit and Greyhound, "significantly undervalues" FirstGroup's continuing operations and its future prospects. As such, its board has unanimously rejected the proposal.
----------
COMPANIES - SMALL CAP
----------
AO World said it will close its business in Germany. Having launched a strategic review of the business in January, the retailer concluded closure was the best course of action. "This decision was based on the continuing deterioration in the outlook for the German business, as well as the board's responsibilities to shareholders and other stakeholders," AO said. "AO will now increase its focus on its leading online position in the UK electricals market and optimising the group's profit and cash generation potential," it added. AO World said the UK business continues to trade in line with the board's expectations for financial 2023.
----------
Thursday's shareholder meetings
4basebio PLC - AGM
BioPharma Credit PLC - AGM
BlackRock Smaller Companies Trust PLC - AGM
Checkit PLC - AGM
Corero Network Security PLC - AGM
Dignity PLC - AGM
Funding Circle Holdings PLC - AGM
Instem PLC - AGM
Invesco Perpetual UK Smaller Companies Investment Trust PLC - AGM
Kistos PLC - AGM
Kore Potash PLC - AGM
Kosmos Energy PLC - AGM
Northbridge Industrial Services PLC - GM re name change to Crestchic
Northbridge Industrial Services PLC - AGM
Panther Metals PLC - AGM
Rambler Metals & Mining PLC - AGM
REA Holdings PLC - AGM
Round Hill Music Royalty Fund Ltd - AGM
Tungsten Corp PLC - GM re Kofax Offer
Xpediator PLC - AGM
----------
By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
