British American Tobacco flags 2026 earnings hit, eyes Middle East war

(Alliance News) - British American Tobacco PLC said on Wednesday it is closely monitoring the Middle East conflict, and warned that it expects its performance this year to reach the lower end of its guidance.

Speaking at the annual general meeting held on Wednesday, Chair Luc Jobin flagged a 2% to 3% hit to adjusted diluted earnings per share in 2026 due to currency headwinds. Over the medium term, BAT targets between 5% and 8% growth in adjusted diluted EPS.

Jobin also said the London-based cigarette and nicotine product maker expects profit delivery to remain second-half weighted, driven by the phasing of new category investment.

The chair will remain at the helm for the next two years following an extension of his tenure. In February, the BAT board decided to retain him as the search for his successor continues. Jobin joined the BAT board in July 2017, and became chair in April 2021.

The extension represents a departure from the nine-year recommendation set out in the UK corporate governance code, Jobin told shareholders on Wednesday. "However, the board concluded that maintaining consistent leadership is in the best interests of the group and our shareholders during this important phase of our transformation," he said.

At the AGM, Jobin said the maker of non-combustible products like Vuse and Velo continues to expect performance at the lower end of its guided ranges this year, reflecting the time required to stabilise the Asia Pacific, Middle East and Africa region and continued investment behind premium innovation roll-outs.

BAT expects revenue growth of between 3% and 5% over the medium term, while projecting an increase in adjusted operating profit between 4% and 6%.

Jobin said BAT began 2026 "with accelerating momentum", noting that the group is "closely monitoring" the Iran war. "As of today, the conflict is not currently having a significant impact on the group's business," he said.

Reflecting on the 2025 performance, Jobin said the company had delivered at the top end of its guidance.

In February, BAT reported pretax profit of GBP9.86 billion in 2025, multiplied from GBP3.54 billion a year earlier. Revenue over this period was down 0.9% to GBP25.61 billion from GBP25.87 billion.

The company behind Dunhill lifted its total dividend to 245.04 pence in 2025, up 2.0% from 240.24p in 2024, and launched a GBP1.3 billion buyback programme in 2026.

Shares in BAT were up 0.1% at 4,227.00p on Wednesday in London. In Johannesburg, they were up 0.3% at ZAR939.99.

By Artwell Dlamini, Alliance News senior reporter South Africa

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