Owner of prominent cigarette brands such as Lucky Strike, Camel, and Pall Mall has reportedly registered an appreciable rise in profits of around 9%, regardless of a decline in sales caused by the coronavirus pandemic.

The British American Tobacco (BAT), in this regard, stated that overall cigarette sales reduced by around 5% last year, majorly due to travel restrictions which severely hit the duty-free trade along with the sales ban enforced in South Africa on account of Covid-19 pandemic. However, with rise in prices, the total value of cigarettes sold increased.

According to reliable resources, sales of vaping kits, which BAT sells under brands Vuse and Vype, rose 52%, with online sales of vape climbing 40% as the BAT brands secured 17,500 regular subscriptions. Chief executive, Jack Bowles, stated that BAT had over 13.5 million consumers for its non-combustible products, 3 million more than last year.

Sources have reported that, with annual profit before tax increasing to £8.7 billion, BAT made way for easy profits owing to cost savings, that hit the £660 million mark last year, and appreciable brand strength and diversification of smoking alternatives. However, the company also has a net debt of £40 billion, which it needs to closely monitor.

Apparently, its shares, which have reduced more than half since 2017, declined by nearly 5% during morning trade recently.

As per reliable sources, for the market, besides changing tastes, the overall threat of stringent litigation as well as regulation have been a challenge for a considerable time. In addition, there is a strong possibility that the investors might avoid the tobacco sector on account of growing significance of ethical considerations.

As part of the group’s goal of making £5 billion in sales from new products by 2025, it has started the testing of its first cannabidiol based vaping products in Manchester last month.

Source credit: https://www.theguardian.com/business/2021/feb/17/british-american-tobacco-profits-rise-despite-drop-in-sales