British American Tobacco records rise in profit despite sales drop

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.

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Having completed her Post Graduate degree in Digital Marketing, Shreshtha always nurtured an innate passion for writing. She works as a content writer at and pens down news articles spanning numerous verticals. Her other interests include reading and travelling.