British American Tobacco sales fall as âillicit single-useâ vapes hamper trading
Shares fell as much 9% as it revealed a slight decline in US vape sales, which it has touted as the future of the smoking industry.
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British American Tobacco (BAT) shares plunged on Thursday after it reported underwhelming vape sales in the US and forecast a slowdown across the smoking industry this year.
The maker of Camel and Lucky Strike cigarettes made 0.8% less in 2024 vape sales than the previous year in its key American market.
So-called ânew categoryâ products like vapes and oral tobacco have been touted as the future of the sector, and BAT has said it wants to be a âpredominantly smokelessâ business by 2035.
But the âgrowing presence of illicit single-use vapour productsâ hampered its ability to sell more of its own vapes last year.
Shares in the London-listed company fell as much 9% on Thursday.
BAT says it wants to be a âpredominantly smokelessâ business in 2035, with vapes and oral tobacco seen as the future of the sector (Nick Ansell/PA)
PA Wire
Russ Mould, an analyst at AJ Bell, said the smokeless pledge is âall very well⦠but it does beg the question of whatâs going to replace the revenue and cash flow provided by selling cigarettesâ.
Last year, vapes and other new product lines contributed less than one-tenth, at just £249 million, of BATâs £2.7 billion profit.
In the relatively small UK market, meanwhile, the company said vape sales continued to grow.
Meanwhile, its US cigarette sales plunged 10.1%, as a fall in consumer spending pushed more people to buy discount products, rather than BATâs premium ranges.
Chris Beckett, an analyst at investment firm Quilter Cheviot said: âConsumer companies are stuck in somewhat of a difficult environment just now.
âConsumers simply arenât spending as they were in the aftermath of the pandemic,â he said.
Turnover decreased by 5% to £25.9 billion at the tobacco giant, while it expects that to grow by 1% in 2025.
Chief executive Tadeu Marroco said: âWe are making good progress and while there is still more to do, I am certain that the investment actions taken in 2024 are the right way forward for BAT.â