Cigarette manufacturer British American Tobacco (LSE:BATS) reported a cautious growth outlook for 2025 on Thursday, which caused its shares to drop over 6%.
The company’s organic revenue and operating profit growth for the 2024 financial year were in line with expectations. However, its guidance for 2025 was weaker than anticipated, with projected revenue growth of approximately 1% at constant rates, falling short of consensus estimates, which expected growth of around 2.8%.
The company cited increased excise taxes and value-added tax (VAT) in Bangladesh, along with new regulatory pressures in Australia, as headwinds for the upcoming year.
Additionally, cigarette volumes declined by 5% on an organic basis, outpacing the broader industry’s 2% decline. Market exits and supply chain disruptions in Sudan further compounded these losses.
Investor sentiment was negative, despite the company reaffirming its planned £900 million share buyback for 2025, which analysts noted was already reflected in the stock price.
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