Tobacco giant British American Tobacco plc posted preliminary full-year results on Thursday, reporting a slight decline in reported revenue but modest growth at constant currency rates.
British American Tobacco said revenues had slipped 1% to £25.61bn in the year ended 31 December, but rose 2.1% at constant rates, with its new categories division accelerating to double digits in the second half, delivering full‑year revenue growth of 7% to £3.62bn, while its contribution to profit jumped 77% to £442m.
Reported profits from operations surged 265% to £9.99bn, largely reflecting a 28.4 point expansion in reported operating margins to 39.0%, which was a result of movement in its Canadian settlement provision. Adjusted operating profits rose 2.3% at constant currency to £11.63bn and reported diluted earnings per share climbed 157% to 349.1p, with adjusted EPS up 3.4% at constant currency.
British American Tobacco said it solid performance was supported by its combustibles offering and Velo Plus in the US, as well as multi‑category gains in Africa and the Middle East and stated it was confident in its mid‑term growth algorithm, with the group expecting its FY26 performance to land at the lower end of guidance.
Looking ahead, BATS reiterated that it was on track to bring leverage down to between 2.0x and 2.5x by the end of next year, supported by strong cash generation.
BATS also announced a 2% dividend increase to 245.04p and confirmed a £1.3bn share buyback for 2026.
Chief executive Tadeu Marroco said: "I am pleased with our accelerating momentum through 2025, enabling full-year delivery at the top end of our guidance. This reinforces our confidence in sustainably delivering our mid-term algorithm from 2026.
"Our strong cash flow is driving increased financial flexibility and we expect to be within our 2.0-2.5x target leverage range by end 2026."
Reporting by Iain Gilbert at Sharecast.com