British American Tobacco Plc said in a first-half earnings report preview that its business “continues to perform well” and made no change to its fiscal 2019 financial guidance.
The global manufacturer said its first-half reporting period will end July 2.
Unlike U.S. publicly traded companies that issue quarterly earnings reports, U.K. corporations are required to produce first-half and full-year reports.
BAT is the parent company of Reynolds American Inc., which has between 2,500 and 3,000 employees in Forsyth County, primarily at its 2-million-square-foot manufacturing plant in Tobaccoville.
BAT said it remains “on track for constant currency revenue growth in the mid-upper half of our long-term guidance range of 3 percent to 5 percent.”
“Combustibles continue to perform strongly, driven by the growth of the strategic brands (that include Newport and Camel) and good pricing.”
The Big Three U.S. tobacco manufacturers — Philip Morris USA, R.J. Reynolds Tobacco Co. and ITG Brands LLC — raised their per-pack prices by 9 to 10 cents in April.
The increase follows Philip Morris’ recent pattern of raising prices every six months or so, which Reynolds and ITG tend to quickly match.
BAT said that new category revenue growth, which includes electronic cigarettes, heat-not-burn traditional cigarettes, snus and other oral tobacco products, are “approaching our full-year guidance range ... around the middle of the 30% to 50% range.”
It cited as an example that R.J. Reynolds Vapor Co.’s Vuse Alto e-cigarette has reached a retail volume market share of 8.3%. That boosts the overall Vuse portfolio to 19.1%.
By comparison, top-selling e-cigarette Juul was at 74.5%, according to the latest Nielsen data.
Reynolds’ business “is performing well with good pricing and continued value share growth” in an industry expected to be down 4% to 5% on a volume basis for fiscal 2019.
Philip Morris USA, maker of top-selling Marlboro, has issued guidance of a 4% to 5% volume decline. Wells Fargo Securities analyst Bonnie Herzog projects volume decline for 2019 from 4.8% to 6%.
“We are creating a stronger, simpler business and driving a step change in new categories, built on the foundation of a strong combustible business,” Jack Bowles, who became BAT’s chief executive in April, said in a statement.
“With our focus on building global brands, we intend to consolidate our new category portfolio into fewer brands.”
For fiscal 2018, the first full year of total ownership of Reynolds bolstered BAT to a 45.2% jump in profit at $12.39 billion.
Full-year revenue increased 25.2% year over year, to $32.57 billion, with the United States representing the largest global sector, at $12.63 billion, or 30.7%.