British American Tobacco PLC trims earnings guidance despite strong cigarette

() has stubbed out its previous earnings guidance for 2020 despite expecting a smaller hit on sales from the coronavirus pandemic.

Adjusted, diluted earnings per share are now only expected to grow by mid-single figure percentages, compared to guidance for a high single figure given in July’s interims.

This partly reflects the board’s decision to fire up further spending on new categories such as vaping and nicotine pouches, which is expected to increase by around £200m in the second half, which the group said was to be “capitalising on investment opportunities and good momentum in the business”.

There was also “significant negative impact” from the coronavirus pandemic on associate income, which is likely to be from a stake in India’s ITC.

The FTSE 100 group’s business is “performing strongly”, said chief executive Jack Bowles in a pre-close trading update that was full of well-meaning statements, but he said last year’s strong performance was tough to beat.

Revenues at constant currency rates are expected to grow towards the high end of the 1%-3% range previously given.

This has been helped by global industry growth for cigarettes and other tobacco products that is now projected to decline by around 5% compared to circa 7% previously.

BAT reported strong cigarette price mix, driven by a continued good performance in developed markets, with the US growing market share, while also growing revenue and market share in vaping and other new categories.