British American Tobacco says Covid hit less pronounced than expected

British American Tobacco backed its guidance for 2020 on Wednesday but said constant currency adjusted revenue growth was set to be at the high end of the range after the Covid-19 pandemic dented revenue by less than previously anticipated.

The tobacco company now expects revenue growth at the top end of its 1% to 3% range, as the headwind from Covid reduced to around 2.5% from a previous estimate of 3%. This includes absorption of a one-off impact to its ‘new category’ revenue of £50m, following the group’s decision to withdraw the glo Sens product from Japan.

BAT said it now expects a global industry cigarette and tobacco heating products volume decline of around 5%, an improvement on previous expectations of a 7% fall. The company said this was down to the earlier-than-anticipated lifting of the sales ban in South Africa, continued resilience in developed market volumes and an improvement in emerging market volumes.

Meanwhile, the US industry is expected to be broadly flat, versus a previous forecast for a 2.5% drop, "following continued volume resilience in the market".