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British American Tobacco has boosted its sales growth expectations after reporting a record number of new users of its product vaping.
The FTSE 100 company said on Tuesday that the attractiveness of “non-smoking” products, such as the Vuse vaping device, was growing, with 1.4 million new customers added in the last quarter ending June.
Tobacco companies are making efforts to build market share in so-called “modern products” as public health campaigns have lowered smoking rates around the world.
BAT currently consumes nearly 15 million products, such as vaping devices, heated tobacco and oral nicotine bags. This compares to the 638 billion cigarette sticks the company sold to 140 million smokers last year.
The “quarterly record for consumer purchases” prompted BAT to raise its full-year revenue growth forecast from more than 5 percent to 5 percent. The previous orientation was 3 to 5 percent.
Earnings per share remained in line with the previous forecast of “mid-digit” growth as the company increases its investment in modern products, a category it expects to be profitable by 2025.
Jack Bowles, CEO of BAT, said 2021 will be crucial for the business, as it will have brands like Lucky Strike and Dunhill cigarettes.
Tobacco depots have come under pressure, partly due to concerns about further regulation. Some countries, however, do not have tougher rules on smoking, such as Pakistan, Bangladesh and Vietnam, and BAT considered them a key area for growth on Tuesday.
BAT’s share price, which has fallen nearly 10% in the past year, rose 2 percent on Tuesday morning.
Alicia Forry, an analyst at Investec, said BAT’s Vuse is approaching “global leadership” in vaping, with a market share of more than 31 percent in the world’s five largest markets.
In recent months, billionaire investor Kenneth Dart has become quiet The third largest shareholder in BAT, to build a stake worth almost 4.5 million euros.
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